Private Market Investment in the EU: Prudent Access for Retail Investors

Private markets are becoming a bigger part of Europe’s financial system. Private equity, private credit, infrastructure, and other long-term assets can help finance companies, support innovation, and fund major investment needs that public markets and banks may not fully meet. This report examines how the European Union (EU) is opening private markets to a wider investor base, especially through European long-term investment funds (ELTIFs). These funds give asset managers a regulated way to package private assets and market them across the EU, including to some retail investors. The report supports broader access in principle, but it urges caution in marketing to retail investors. Private assets can offer diversification and higher expected returns, but they also entail challenges given the low transparency and high costs of the asset class.

At a Glance

• Explores retail investor access to private markets in the EU.
• Examines ELTIFs and the evolution of private equity, private credit, and infrastructure investing.
• Assesses investor protection, investor suitability and market integrity for private market investments.
• Evaluates opportunities and risks of expanding retail participation in private assets.
• Recommends policy reforms to support EU capital markets and long-term investment.

The report explores retail investor access to private markets in the EU, focusing on ELTIFs and how recent reforms have made this fund format more flexible and attractive to asset managers. It examines the growth of private equity, private credit, and infrastructure investing in Europe. Although private market funds are expanding quickly, ELTIFs remain a small niche within the broader EU alternative investment fund market.

The report also assesses the risks of wider retail participation — including limited transparency, complex valuations, high costs, conflicts of interest, and redemption limits. It recommends reforms to support responsible growth through stronger supervision, better suitability standards, reduced fragmentation of the EU market, clearer tax treatment, and improved retail investment rules.

This report is for EU and national regulators shaping private market and retail investment policy; asset managers and distributors designing and marketing private asset funds; and advisers and wealth managers assessing investor suitability. It will also interest institutional investors, pension funds, policymakers, and investor advocates focused on building deeper, more integrated EU capital markets while preserving investor protection.

Private assets continue to gain ground over public markets. Several jurisdictions have widened access also for retail investors. In the case of the EU, stronger funding channels for innovation, infrastructure, and sustainable investment are needed. Private markets could help, but only with the right safeguards. The recent ELTIF reforms give fund managers more flexibility and allow broader marketing, driving a sharp rise in new fund launches in 2024 and 2025. That growth makes retail investor protection more urgent.

Private market funds are complex, costly, and often illiquid, so investors need clear explanations of what they own, what they pay, when they can exit, and what risks they bear. As the EU advances its Savings and Investments Union agenda, it must prioritize prudent access for suitable investors while tackling fragmented fund rules, inconsistent national practices, tax differences, high costs, and weak retail disclosure.

• How ELTIF reforms are expanding access to private equity, private credit, infrastructure, and other long-term assets.
• Why broader retail participation raises concerns around cost, liquidity, valuation, transparency, and suitability.
• How private market funds could support EU capital markets and long-term investment goals.
• Which policy and industry reforms are needed to promote prudent access while preserving investor protection.