Eurizon announces the placement on the Italian market of Eurizon Italian Fund – ELTIF, the first closed-end fund that complies with European legislation on ELTIFs (European Long Term Investment Funds). The creation of ELTIFs meets the indications of the European Commission on quality standards and opportunities for financial architectures that improve the availability of long-term financing. A financial vehicle with these characteristics is proposed as a valid alternative method of financing small and medium capitalization companies, which represent the backbone of Italian entrepreneurship and which often encounter difficulties in obtaining financial resources.
The ELTIF joins the PIR funds launched in 2017, of which Eurizon was one of the main promoters. Thanks to the PIRs, an alternative channel to bank financing has been created for medium-sized companies, towards which approximately 1/3 of the 15 billion euros collected overall by the system have flowed. To direct resources towards companies and projects characterized by lower liquidity, or even illiquid, it is necessary to combine PIR compliant open-ended funds with new closed-structure solutions, such as ELTIFs. The capital raised through ELTIFs can, in fact, be directed to finance medium-long term projects of companies belonging to low capitalization segments such as AIM, start-ups and companies with high innovation potential.
On the basis of these premises, Eurizon has created the first ELTIF for the Italian market, a closed-end fund which locks the investment over a 7-year horizon. Eurizon Italian Fund – ELTIF is a fund incorporated under Italian law which uses a discretionary management approach, with regulations favorable to long-term investment strategies. In fact, it provides for a minimum investment of 70% in long-term assets, with an exposure of more than 50% to Italian equity instruments. Furthermore, it allows for a maximum of 25% to be invested in unlisted instruments.
The new fund requires specific advice given the nature of the investment, the illiquidity of the underlyings and the potential volatility. It is therefore aimed at an advanced clientele, with good financial preparation and a high capital capacity who can use the ELTIF as a tool to diversify their investments. The creation of this first Eurizon closed-end fund strengthens the company's commitment to support the real economy and is consistent with the initiatives of the Intesa Sanpaolo Group as a driver for the development of Italian companies, particularly in the SME segment, of which it finances more than 200 structured companies and supports the development of 2500 startups registered in the programs of the Ministry of Economic Development.
Tommaso Corcos, CEO of Eurizon, he says, “We are convinced that the closed structure envisaged for ELTIFs represents the best formula for financing medium/long-term projects even for companies belonging to low-cap segments. The skills historically developed in Eurizon in the selection of this type of reality - adds Corcos - have made it possible to quickly create a dedicated closed-end fund, capable of selecting innovative small and medium-sized Italian companies with greater growth prospects, placing a strong focus on the quality of corporate governance.”
