17 September 2026
Europe wants to put more of its savings to work. Private equity, private credit, infrastructure and other long-term assets could help finance innovative companies, the green and digital transitions, and infrastructure investment at a time when neither bank lending nor public equity markets appear sufficient to meet the continent’s funding needs.
But opening private markets to a wider investor base creates a difficult trade-off. The same characteristics that can make these assets attractive—long investment horizons, an illiquidity premium and greater investor involvement—also make them more complex, less transparent and harder to value.
This tension is at the centre of Private Market Investment in the EU: Prudent Access for Retail Investors, a new report by Alexander Lehmann, Director, Capital Markets Policy (EU) at CFA Institute. The study is part of the CFA Institute Research and Policy Center’s broader work on the growth of private markets and was developed with input from several European CFA Societies, including CFA Society Italy.
ELTIF 2.0 changes the landscape
At the heart of the European debate is the European Long-Term Investment Fund (ELTIF).
Introduced in 2015, the original framework was intended to create a common regulated vehicle through which long-term private assets could be marketed across the EU. The first version, however, attracted limited interest from both fund managers and investors.
The 2024 reform changed that picture. Rules governing eligible assets and portfolio construction were significantly relaxed, making ELTIFs more flexible and broadening their potential distribution. The industry response has been strong, with a record number of funds launched in 2024 and 2025.
Even after this acceleration, however, ELTIFs remain small in the context of Europe’s investment-fund industry. At the end of 2025, they managed approximately €34 billion, compared with around €8.2 trillion across the EU alternative investment fund sector.
The report therefore cautions against seeing ELTIFs as a solution in themselves. Greater scale could help improve investor recognition and potentially reduce the high costs associated with private-market funds, but the vehicle remains a niche segment rather than a transformative source of financing for the European economy.
Access is only one side of the equation
The more fundamental issue is who should invest.
Traditionally, private-market funds have been dominated by professional and institutional investors capable of conducting extensive due diligence, negotiating fees and scrutinising fund managers. Private assets are also subject to substantially lower disclosure requirements than securities traded on public markets.
Under the revised European framework, most ELTIFs can be marketed to retail investors, while previous additional restrictions around investor suitability have been removed. CFA Institute supports broader access in principle, recognising the potential diversification and return benefits of illiquid assets, but argues that the change needs to be accompanied by stronger safeguards.
In particular, the report recommends adapting MiFID suitability rules to the specific characteristics of private assets. It also suggests that indirect exposure through structures such as funds of funds, regulated insurance products or pension schemes may provide a more appropriate route for many individual investors, provided that layered fees can be kept under control.
This distinction is important. Expanding access does not necessarily mean turning private markets into a mass-market investment product. The report argues that ELTIFs, given their complexity, high costs and limited liquidity, should not be regarded as suitable for inexperienced retail investors. Initial distribution should instead focus on investors with sufficient experience and capacity to understand the risks involved.
The challenge goes beyond ELTIFs
The success of private-market investment in Europe also depends on addressing weaknesses in the broader EU capital-market architecture.
Fragmentation remains a central obstacle. Differences in national supervision, taxation and implementation of EU rules make cross-border distribution more difficult and limit the scale individual funds can achieve. CFA Institute therefore calls for greater harmonisation, streamlined tax treatment and less national “gold-plating” of European regulation.
There is also a wider retail-investment problem. High costs, ineffective disclosures and potentially misaligned adviser incentives have historically constrained household participation in European capital markets. These weaknesses become even more significant when the products being distributed are inherently complex and expensive private-market vehicles.
The report consequently places ELTIF reform within the EU’s broader Savings and Investments Union agenda. Mobilising more household savings towards productive investment requires not only new products but also a market in which investors can understand costs and risks, receive appropriate advice and have confidence in the way products are governed and distributed.
A role for private markets — but not a shortcut
Private markets could become an important part of Europe’s response to its long-term investment gap. They can provide additional financing for companies and infrastructure while giving suitable investors access to assets and return sources that are largely absent from public markets.
But the report’s message is deliberately measured. ELTIF 2.0 is an enabling framework, not a shortcut to deeper European capital markets.
For investment professionals, the growth of retail access therefore places greater emphasis on suitability, due diligence, valuation, liquidity, fees and governance. For policymakers, it reinforces the need to combine product innovation with broader reforms that reduce fragmentation and strengthen investor protection.
Europe’s challenge is not simply to persuade households to allocate more capital to private markets. It is to create the conditions in which long-term savings can be channelled towards productive investment without asking investors to assume risks they do not fully understand.
Read Private Market Investment in the EU: Prudent Access for Retail Investors