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Goldman Sachs AM enters burgeoning ELTIF market

The firm said the fund will provide access to direct private market investments

Goldman Sachs Asset Management has said it has raised more than $200m for its first European Long Term Investment Fund (ELTIF).

The firm said in a statement that the fund will provide individual investors with access to a number of direct private market investments managed by the firm. It also said that the fund is intended to be the first in a series of Private Markets ELTIFs, through which individual investors can access the performance and diversification benefits of private markets.

Barry Fricke, EMEA head of alternatives distribution for wealth at Goldman Sachs Asset Management, said: “Institutional investors have long benefited from private investments, which have the potential to provide higher returns, portfolio diversification, and access to unique opportunities. Now, individuals will also be able to get exposure to private investments through our Private Markets ELTIF, a fund specifically designed to meet the needs of individual investors.”

He added: “This fund is part of a broad and deep commitment to open up our private markets business to suitable individual investors through innovative and high-quality products, supported by education and training for our wealth management distribution partners.”

Goldman Sachs’s entry into this space comes months after Blackrock said that ELTIFs should be experience ‘rapid growth’ in the next few years.

As Expert Investor wrote in March, a sixteen-page report from the firm, ELTIFs: The quiet boom in EU wealth management, stated that the market was estimated at having reached €10bn at the end of last year, with an additional €100bn in assets under management expected over the next five years. Other figures, calculated by Scope Group, estimate that the market grew by more than fifty per cent in 2022, compared to the previous year.

ELTIFs were first established by the European Union (EU) in 2015, with the intention of helping boost long-term investment in the economy. At the time, the European Commission (EC) said that €1,500 to €2,000 billion would be needed to finance infrastructure project needs alone in Europe up to 2020.

And in March, the amended regulations behind the instrument, known as ELTIF 2.0, were released. These are set to come into force in January.

As HSBC wrote when these amendments were released: “Key regulatory improvements have been made with an intended renewed interest in the vehicle. These include removing barriers to entry for retail investors and amending restrictive fund rules to increase the uptake of the ELTIF. The European co-legislators expect the enhancements will make the ELTIF 2.0 a more attractive proposition for global asset managers and bring benefits to economic growth, ideally supporting the transition to climate neutrality.”

It added: “ELTIF 2.0 was included as a key part of the 2021 Capital Markets Union package, with potential economic benefits including an alternative non-bank source of funding and job creation. The amendments are also consistent with the priorities of the European Green Deal, seeking to address sustainability goals and climate neutrality objectives through long-term financing strategies. It also offers investors access to the desired benefits of long-term investment including the potential for increased stability of returns and an improved resilience to short-term market events.”

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