The European investment funds landscape is undergoing rapid transformation, with Luxembourg at the forefront as the premier domicile for infrastructure and European Long-Term Investment Funds (ELTIFs). The introduction of ELTIF 2.0 in early 2024 has catalysed a new wave of product innovation, investor access, and capital mobilisation into strategic sectors such as energy transition, transport, social infrastructure, greenfield, brownfield, and public-private partnerships (PPP). In this article, we examine the regulatory, structural, and market drivers positioning Luxembourg as the EU’s infrastructure fund hub, and how the ELTIF 2.0 regime is reshaping investor alignment and multi-asset fund design.
With over 100 ELTIFs domiciled – representing nearly two-thirds of Europe’s total – and a robust regulatory and operational infrastructure, Luxembourg continues to attract asset managers, institutional investors, and private wealth. The jurisdiction’s capacity to support evergreen, semi-liquid, and hybrid private asset vehicles is driving innovation across infrastructure, private debt, and multi-asset strategies. As the revised ELTIF regime opens new doors for retail and long-term capital, Luxembourg’s regulatory framework and ecosystem reinforce its position as the leading hub for infrastructure and real asset funds. Explore further expert perspectives on fund structuring and regulatory trends at the Damalion blog.
ELTIF 2.0: Transforming Access to Infrastructure and Private Markets
The enactment of ELTIF 2.0 (Regulation [EU] 2023/606) in early 2024 marked a pivotal evolution for long-term investment vehicles in Europe. The updated regime delivered a host of enhancements: expanded eligible assets (notably infrastructure and private markets), lower minimum investment thresholds, relaxed diversification and borrowing limits, and – crucially – the ability to launch open-ended and semi-liquid structures. This overhaul was designed to mobilise private capital into critical European projects and to democratise access to private assets for a broader investor base, including pension funds, insurers, and increasingly, retail investors.
EFAMA’s June 2026 FAQ, developed with Arendt, clarified key operational aspects: portfolio composition, redemption features, liquidity management, and the integration of ELTIFs in insurance and pension products. The “retailization” of alternatives – enabled by periodic liquidity and semi-liquid formats – has blurred the lines between traditional AIF structures and products accessible to private banking and mass-affluent segments. According to EY Luxembourg, ELTIF assets under management (AUM) surged from EUR 22 billion at the end of 2024 to EUR 34 billion by end-2025, reflecting a 55% year-on-year increase and a structural shift toward infrastructure and private debt strategies.
Luxembourg: Europe’s Dominant ELTIF and Infrastructure Fund Domicile
Luxembourg’s ascent as the leading domicile for ELTIFs and infrastructure funds is underpinned by a combination of regulatory agility, depth of expertise, and operational sophistication. As of early 2026, more than 100 ELTIFs are domiciled in Luxembourg, accounting for approximately 63% of Europe’s total (per ALFI’s 2024 Annual Report and the 2025 ALFI Private Assets Conference). The jurisdiction’s dominance is further evidenced by its hosting of around 142 evergreen fund structures, a format increasingly popular due to the flexibility and periodic liquidity enabled by the ELTIF 2.0 regime.
The CSSF, Luxembourg’s financial regulator, has played a pinfrastructurencluding requirements for UCI Part II, SIF, SICAR, and feeder/master structures, as well as prospectus and liquidity management standards. ALFI and EFAMA have also been instrumental in providing industry briefings, technical guidance, and thought leadership to ensure smooth implementation and best practices.
Notably, leading asset managers are anchoring their infrastructure strategies in Luxembourg. For instance, the Allianz Global Infrastructure ELTIF—managed by Allianz Capital Partners GmbH, Luxembourg branch, and custodied by BNY Mellon Luxembourg SA – was launched in July 2024 with EUR 71 million in fund assets (as of March 2026). The continued growth of such flagship vehicles reflects the jurisdiction’s appeal for global sponsors seeking an EU-wide passport and robust governance.
Structural Innovation: Evergreen, Semi-Liquid, and Multi-Asset Vehicles
The flexibility of Luxembourg’s fund ecosystem, combined with the enhanced provisions of ELTIF 2.0, is enabling a new generation of infrastructure and private market vehicles. Evergreen and semi-liquid structures—now representing a substantial share of new launches – are particularly attractive to pension funds, insurers, and private wealth managers seeking long-term yield with periodic liquidity. This trend is further supported by Luxembourg’s proven platforms: RAIF, SIF, SICAR, and Part II UCIs, which allow for efficient compartmentalisation and multi-asset strategies.
The evolving regulatory landscape also supports a broad range of infrastructure assets: energy transition (renewables, grids, storage), transport (rail, roads, logistics), social infrastructure (health, education), as well as greenfield and brownfield projects and PPPs. Luxembourg’s fund toolbox enables managers to tailor structures – such as the launch of infrastructure funds and hybrid debt/equity vehicles—to the diverse requirements of institutional and retail allocators.
With the rise of digital and energy infrastructure, Luxembourg’s framework supports innovative launches, such as the Digital infrastructure ScSp SICAV RAIF and the Energy and Power Infrastructure Credit Master Fund. These vehicles demonstrate Luxembourg’s ability to adapt regulatory and structuring solutions for fast-evolving sectors and cross-border capital flows.
Regulatory and Market Outlook: Sustaining Luxembourg’s Competitive Edge
Looking ahead, Luxembourg’s leadership in infrastructure and ELTIF funds will be shaped by continued innovation, regulatory clarity, and alignment with investor needs. The “retailization” of private assets is expected to accelerate, with semi-liquid and evergreen ELTIFs serving as a bridge between traditional AIFs and UCITS. The CSSF’s ongoing engagement and guidance will be critical to maintaining investor protection and market stability as product innovation continues apace.
For sponsors, asset managers, and investors, Luxembourg remains the jurisdiction of choice for structuring infrastructure and long-term investment funds. Damalion supports clients with ELTIF 2.0 structuring, long-term investor alignment, and the creation of multi-asset infrastructure vehicles tailored to evolving regulatory and market demands.
