“When the ELTIF was first created, the driver was a desire to incentivise long-term investment and infrastructure was singled out as a focus by politicians at the time,” says Andrew Henderson, a partner at Goodwin’s financial services, fintech and private investment funds practices in London. “By its nature, infrastructure investment emphasises the long term, and the time horizon of these investments can be decades.” “There’s a strong political angle with both the EU and UK pushing towards net zero and while not all infrastructure is necessary environmentally friendly, much is,” says Henderson. Henderson’s colleague and knowledge and innovation counsel at Goodwin, Chris Ormond, adds: “While neither the ELTIF or LTAF structure require there to be any environmental or social angle to the investment strategy, the emphasis on long-term and illiquid investments neatly aligns with that sort of asset.” “Wealth managers need to confront ESG issues when looking to engage with retail investors,” says Henderson. But he believes further work will be needed to ensure that private markets managers are able to meet the expectations of retail investors for regular reporting through standardised approaches. “Standardisation of measuring environmental impacts is going to be vital here because retail investment products really need to be streamlined and consistent, so we need industry agreement on ESG reporting.” For more information on long-term vehicles, read the article on Private Debt Investor.