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By James Abram, Account Manager at Multifonds and Isabell de Wit, Regional Director, Europe, at Multifonds, as published in Insight/Out magazine #38.
The ELTIF market today: accelerating, but still uneven
A year ago, ELTIF 2.0 showed promise but had yet to deliver breakout growth. Twelve months on, the picture is more encouraging, though still complex.
The market has expanded meaningfully. The combined ELTIF universe, across both closed-end and open-end structures, reached nearly €28 billion by Q3 2025[i]. On the back of this, Scope Fund analysis estimates ELTIF volume at between €65 billion and €70 billion by the end of 2027, at least three times larger than in 2024.[ii]
Product proliferation has also accelerated. By the end of 2025, 268 ELTIFs had been registered, including 113 new funds launched in the year. Of the funds launches in 2025, a variety of asset classes were represented:
- Multi-asset ELTIFs grew by 79%
- Infrastructure strategies increased by 48%
- Private equity expanded by 31%
- Private debt rose by 28%
This diversification signals a maturing market, with managers exploring different ways to package private assets for a wider investor base.
Liquidity management: the first real test
If 2024 was about regulatory clarity, 2025 was about real-world stress testing.
The suspension of redemptions by an Irish-domiciled ELTIF late last year marked the first gating event in the European market. While isolated, it highlighted a fundamental challenge: reconciling illiquid underlying assets with semi-liquid fund structures.
This is not a new issue; similar tensions have long existed in other jurisdictions, but its arrival in the ELTIF space is significant. It underscores that liquidity management is not just a technical requirement, but a core determinant of investor confidence.
For managers, this has sharpened focus on technology to provide:
- Robust liquidity frameworks
- Clear redemption policies
- Stress testing under different market conditions
For investors and regulators alike, it reinforces the need for transparency around how these products behave under pressure.
Distribution: expanding reach, raising new questions
Distribution has improved, but remains uneven.
Traditional bank-led channels still dominate. Large institutions continue to invest heavily in adviser education. For example, one major European bank has trained more than 2,000 advisers across dozens of sessions to support ELTIF distribution. This reflects both commitment and complexity: private market products require a fundamentally different sales approach compared to traditional funds.
At the same time, digital platforms are beginning to reshape access. Neo-brokers and online banks are entering the space, opening ELTIFs to a broader retail audience. This is a crucial step toward true “retailisation.”
However, this shift introduces new risks. Wider access does not automatically equate to better understanding. Semi-liquid structures, long investment horizons, and complex underlying assets require a level of investor education that digital channels must work hard to deliver.
The result is a market at a crossroads:
- Broader access than ever before
- But ongoing questions around suitability and investor comprehension
Market structure: concentration and scale challenges
Despite the increase in launches, scale remains concentrated.
The top 10 open-end ELTIFs account for nearly 70% of total open-end AUM, highlighting a strong first-mover advantage and the importance of brand, distribution reach, and operational capability.
Most managers are still testing the waters:
- The majority have launched just one ELTIF
- Only a handful are building multi-product strategies
At the same time, large global private market firms are entering the space, expanding the competitive landscape and raising expectations around product design, distribution, and performance.
Domicile trends also reflect the market’s structure:
- Luxembourg remains dominant, hosting the majority of ELTIFs
- France is a strong second, supported by local incentives
- Other jurisdictions—including Ireland, Germany, and Spain—are gradually gaining traction
Under ELTIF 2.0, we are seeing more traditional, liquid-focused fund administrators are stepping into the space, more able to cater to the technology demands of semi-liquid products than pure private asset specialists that historically dominated the regime.
This shift highlights both the framework’s increased flexibility demands and the broader convergence between public and private markets.
What still needs to happen
Another year on, the original challenges have not disappeared; they have simply evolved.
Liquidity management is still front and centre, requiring more sophisticated frameworks and clearer communication.
Distribution is improving, but still fragmented, with education and technology remaining a key bottleneck.
Operational scale continues to favour larger players, as servicing a broader investor base demands automation, integration, and ongoing engagement.
And importantly, investor understanding must keep pace with access. Without it, the risk of misalignment and potential reputational damage to the market remains.
Outlook: steady acceleration, not exponential growth
The ELTIF market is no longer in its infancy, but it is not yet fully mature.
The trajectory now looks clearer:
- Strong pipeline of new products
- Increasing participation from large asset managers
- Expanding distribution channels
- Growing retail engagement
But growth is likely to remain measured rather than explosive.
If the past year has shown anything, it is that building a retail private markets ecosystem in Europe is not just about regulation, it is about infrastructure, education, and trust.
ELTIF 2.0 has laid the foundations. The next phase will determine how far, and how fast, the market can truly scale.
[i] https://www.efama.org/sites/default/files/files/asset-management-report-2025_0.pdf
[ii]https://www.scopeexplorer.com/files/get/?name=news.ReportFile/bytes/filename/mimetype/Scope_ELTIF_study_2025_ENG.pdf
