Inform Member States about the actions implemented to adhere to this Decision.
The private equity sector in Europe has witnessed a significant development in the first half of 2025, with over 60 new European Long-Term Investment Funds (ELTIFs) launched. However, one player, Moonfare, has decided to discontinue the distribution of its private equity ELTIF product.
Moonfare's decision is based on market demand, investor feedback, and strategic considerations regarding product development. The company is winding down the fund, and investors will receive their entire invested capital, along with a 12% interest payment.
The private equity fund is no longer available on the Moonfare platform. This move comes after a year of operation, and while specific internal details might not be publicly detailed, the general reasons behind such a decision typically include limited investor demand, regulatory complexity, liquidity constraints, competitive market alternatives, and strategic business focus.
ELTIFs, designed to facilitate private investors' access to the private capital market, come with stringent regulatory requirements and investment mandates. The administrative and compliance burden can increase operational costs and reduce the commercial viability of the product. Moreover, the ELTIF framework restricts redemption rights, which may deter investors who prefer a degree of liquidity or flexibility in their portfolios.
Despite these challenges, the market for ELTIFs continues to boom, with asset managers focusing on them as a means to attract private and small investors. Wealthtechs like Nao are trying to attract retail investors to private markets through semi-liquid fund structures and low minimum investments. Scope estimates that at least 80 new ELTIFs will launch in the next 12 months.
The failure of the ELTIF product to gain traction among private investors could be due to its long-term investment horizons with strict eligibility criteria and limitations on liquidity. Many private investors find these constraints less attractive compared to more flexible private equity offerings.
However, the market for semi-liquid strategies has gained significant momentum and is growing continuously. ELTIFs are often structured as evergreen funds without fixed terms, and providers advertise the possibility of partial redemptions under certain conditions.
Moonfare, recognizing the potential in this market, might attempt a second launch with a semi-liquid product in the coming years. The company also plans to introduce more corresponding strategies to the market to optimize resources and growth.
Large private market managers, including Blackrock in the US, are hoping to grow their managed assets and collect lucrative fees, despite the saturated institutional market. The competition in the semi-liquid market is expected to rise, with providers vying for a share of the estimated volumes of ELTIFs to reach 65 to 70 billion euros by the end of 2027.
- Given Moonfare's strategic move to discontinue its private equity ELTIF product, the company might consider launching a semi-liquid product in the future, as this market segment has shown significant growth.
- The stiff competition in the semi-liquid market is expected to escalate, as providers strive to tap into the predicted volumes of ELTIFs, estimated to reach between 65 to 70 billion euros by the end of 2027.
