Every technical term from the knowledge chapters, the database, the comparison tool and the fund pages — explained briefly and simply. The big topics behind them are covered in detail in the Knowledge section.
155 Begriffe
European Long-Term Investment Fund — a fund type regulated uniformly across the EU for long-term investment in the real economy. Explicitly intended for retail investors as well.
The revised version of the ELTIF rules in force since 2024. It abolished the former minimum investment of EUR 10,000 and made redemptions easier — the reason for the current boom.
Alternative investment fund — the collective term for all funds that are not classic UCITS retail funds. Almost all private markets funds are AIFs.
A fund with no fixed end date. It runs indefinitely, takes in money continuously and reinvests it — the basis of semi-liquid structures.
Investment company with variable capital (mainly Luxembourg). A common legal shell for funds; the capital grows and shrinks with subscriptions and redemptions.
A SICAV under Part II of the Luxembourg fund law — it may invest in illiquid assets and is also accessible to retail investors.
Reserved Alternative Investment Fund. A Luxembourg structure that can be launched more quickly, because supervision applies to the manager (AIFM) rather than to the fund itself.
Fonds commun de placement à risque — a French fund form for unlisted investments, often used for private equity.
Long-Term Asset Fund — the UK counterpart to the ELTIF for long-term, illiquid investments.
The US equivalent: a fund that allows redemptions only at fixed intervals (e.g. quarterly) and to a limited extent.
The authorised company that manages the fund — it makes the investment decisions and carries the regulatory responsibility.
An independent bank that holds and monitors the fund assets — a layer of protection between the manager and the money invested.
Different variants of the same fund — for example for retail investors or large investors, distributing or accumulating. Costs and minimum investment can differ markedly from class to class.
The globally unique twelve-character identifier of a security — it lets you pin down a specific fund beyond doubt.
The country in which the fund is legally based (often Luxembourg or France). It determines the supervisory authority and, in part, taxation.
The year in which the fund started. Young funds still have little history and are often not yet fully invested.
The legally binding main document of a fund. This is where the real rules on costs, redemption and risks are set out — the basis of our data.
A standardised, short mandatory document showing costs, risk and scenarios. Because it is uniform, it makes funds easy to compare.
EU sustainability classification: Article 6 = no specific sustainability objectives, Article 8 = promotes environmental/social characteristics, Article 9 = pursues an explicit sustainability objective.
The risk indicator from the PRIIPs KID on a scale from 1 (low) to 7 (high). A quick guide to how volatile an investment is.
Indicates whether a fund may officially be sold to retail investors in Germany. Without it, the fund can generally not be subscribed here.
The EU directive for managers of alternative investment funds. The AIFMD II revision (applicable from April 2026) requires open-ended funds, among other things, to anchor at least two liquidity management tools firmly in the fund documents.
The regulatory technical standards under the ELTIF Regulation. Among other things they set out how an ELTIF’s redemption frequency, notice period and redemption quota have to fit together — the shorter the notice period, the smaller the permitted redemption window.
The legally binding rulebook of a fund: investment policy, limits, redemption rules, costs. Where something is disputed — the tax classification, for instance — what counts is what is written here, not the marketing brochure.
The legally required check before you buy: knowledge and experience, financial situation including the ability to bear losses, plus investment objectives and horizon. For ELTIFs it is mandatory on every distribution channel.
The EU financial markets directive governing securities distribution — advice duties, cost transparency, suitability. The ELTIF Regulation refers to it explicitly for the investor assessment.
Pure order execution, without advice and without a suitability assessment. For ELTIFs this route is not permissible in BaFin’s view — so the questionnaire cannot be skipped.
Bundesanstalt für Finanzdienstleistungsaufsicht — the German financial supervisor. It supervises management companies and distribution and publishes interpretative guidance, for example on ELTIF distribution questions.
The European Securities and Markets Authority. It develops the technical standards and guidelines that national supervisors such as BaFin then apply.
The Swiss financial market supervisory authority. The EU distribution passport does not apply in Switzerland: to be offered to non-qualified investors, foreign funds need FINMA approval together with a representative and a paying agent.
The right to offer a fund authorised in one EU country in other EU countries as well, once it has been notified there. What always matters is whether the specific fund is notified for your country.
A financial investment broker holding a trade licence under § 34f GewO. They may broker ELTIFs, but are supervised by the trade authorities rather than by BaFin’s securities supervision.
An advice model in which only the client pays. Unavoidable inducements from third parties must be passed on to them in full — unlike in commission-based distribution.
Commissions and non-monetary benefits that a distributor receives from the product provider. They have to be disclosed; platform discounts on the entry charge, by contrast, are a price reduction for you, not an inducement.
The bank that runs your securities account and holds the units. Not every custodian bank can process ELTIFs technically — which helps decide which funds are open to you at all.
The three-page mandatory EU document with risk indicator, cost disclosure and scenarios. In Germany it is also called the Basisinformationsblatt (BIB); it is the central basis for comparison.
The statutory period within which you can withdraw a subscription free of charge. With ELTIFs it typically falls before the — often only monthly — subscription date.
The binding order to buy fund units. Unlike a purchase on an exchange, the price is not yet fixed when you place it; settlement takes place at the NAV determined later.
Fractions of units instead of whole ones. They make small amounts and savings plans possible and are offered above all by neobrokers.
The classic closed-end fund: you commit capital and the fund calls it down in tranches over the years. The counter-model to the evergreen, where your money is fully invested straight away.
A regulated retail property fund in Germany with a statutory minimum holding period of 24 months and a twelve-month notice period. The historical model and the benchmark for semi-liquid structures.
Regular but limited scope for redemption — between daily dealing and fully closed-ended. Redemption only on fixed dates and capped.
The value of a fund unit: fund assets minus liabilities, divided by the number of units. Subscriptions and redemptions take place at this price. In private markets it rests on valuations, not on market prices.
How often you can come in (buy units) — for example daily, monthly or quarterly.
How often you can redeem units. The more often, the more liquid the fund — quarterly is the most common case.
The fixed date on which redemptions are settled. Outside those dates you cannot get at your money.
How far ahead of a redemption date you have to give notice of your redemption (e.g. 90 days). As a result there are often months between the request and the payout.
A cap on how much may be redeemed in total per date — usually as a percentage of fund assets (often ~5 % per quarter). If it is exceeded, requests are met only pro rata and the rest moves to the next date.
An initial blocking period during which no redemption at all is possible (e.g. the first 12–24 months after purchase).
A discount on the redemption value, often only in the first few years. It is meant to slow down early exits and protect the remaining investors.
The time from the settlement of the redemption until the money is actually in your account (in bank business days).
In exceptional cases the fund can stop redemptions entirely for a while — the strongest protective mechanism when too many investors want out at the same time.
A method that charges the trading costs of large redemptions to those who redeem — so that the remaining investors do not pay for them.
The share of the fund held in readily available investments (cash, listed securities) in order to be able to meet redemptions.
The period the investment is intended for — with semi-liquid funds usually five years or more.
Our own measure from 1 to 5 of how easily you can get at your money — derived from redemption frequency, gate, notice period and redemption discount. It rates access to your money, not the quality of the fund.
Pro-rata allocation when more units are submitted for redemption than the gate allows: everyone is paid the same percentage of what they asked for. So if you want to redeem 100%, a 50% gate leaves you with half.
The toolkit with which open-ended funds steer redemptions without having to sell assets below value: swing pricing, anti-dilution levy, notice periods, redemption in kind, side pockets, gates and suspension.
A charge under which redeeming investors bear the transaction costs they trigger. Economically the same as swing pricing — only here the unit price is not shifted; the party causing the costs is charged directly.
The separation of hard-to-value or illiquid positions into a pot of their own. The main fund stays tradable; the separated part is paid out once it has been realised.
Redemption against assets rather than cash: the investor receives a share of the portfolio. In practice it is only relevant for large, mostly institutional redemptions.
The size of the price adjustment under swing pricing — usually as a percentage of the unit price, with a maximum stated in the prospectus.
Purchases and redemptions are settled at a price that is only determined after the order has been placed. Unlike on an exchange, you therefore do not know the settlement price when you order.
The total annual costs of the fund in per cent (management, custody and other items combined). The single most important cost figure for comparison.
The remuneration for managing the fund — usually a fixed percentage of assets per year, regardless of success.
A one-off charge on purchase (e.g. 3 %). Many platforms reduce it or waive it entirely.
An additional fee on the profit achieved — the manager shares in the success; around 10–20 % of the profit above a threshold is usual.
The minimum return above which a performance fee arises at all (often 5–8 % per year). Only what lies above it is shared.
A clause under which the manager initially receives a disproportionate share of the profit above the hurdle, until the agreed split is reached.
A performance fee arises only if the fund reaches a new high — investors are not charged twice for losses along the way.
The requirement to include the costs of the target funds in the cost disclosure of the fund-of-funds. A correct KID therefore shows the total burden of both levels — not just the fee of the top one.
The sum of all the levels: entry costs, ongoing fund costs, performance fee, target fund costs where applicable, and exit costs. Only together do they show what an investment really costs.
Investments away from the stock exchange — companies, loans, infrastructure, real estate. The counterpart to the listed public markets.
Stakes in unlisted companies that are developed over years and sold later on. In detail in the Knowledge section.
Majority takeover of mature companies, often partly debt-financed — the most common private equity strategy.
Stakes in young start-ups at an early stage: high potential, high risk.
Purchase of existing fund interests from other investors — it spreads risk more widely and softens the early loss phase.
Loans to companies outside the banking system; the investor earns from the interest. In detail in the Knowledge section.
Senior secured loans made directly to mid-sized companies — the lowest-risk form of private credit.
Subordinated loans: higher interest in return for a higher risk of default.
Investments in physical basic structures such as grids, transport and digital assets — long maturities and stable, often inflation-linked income.
Stakes in buildings and land; income from rents and capital growth.
A fund that combines several private markets classes (e.g. equity, credit, infrastructure) — diversification in a single product.
Spreading money across many investments in order to cushion the impact of individual failures — the core idea behind fund-of-funds and multi-asset funds.
Use of borrowed money to enlarge the investment. It raises the potential return — and the risk just as much.
The fund manager who selects the investments, looks after them and sells them. The counterpart to the LP, who provides the capital.
The capital provider in a private markets fund — pension funds, insurers, endowments. Semi-liquid funds bundle many small investors into a comparable role.
The two basic forms in the secondary market: in an LP-led deal an investor sells their fund interests; in a GP-led deal the manager organises a transaction himself, usually via a Continuation Fund.
A new vehicle into which a manager transfers companies from an expiring fund in order to hold them for longer. Existing investors can cash out or come along — pricing is particularly sensitive here.
Investing directly in a single company alongside a fund — usually at lower fees, but with more concentrated risk.
A fund that invests in other funds. Maximum diversification across managers and strategies, but two fee levels — to be added together in the KID via look-through.
Commitments to newly launched funds, that is, coming in at the start. The counterpart to secondaries, where portfolios that are already invested are bought.
The year in which a fund starts investing. Because the entry environment shapes returns so strongly, spreading across several vintages is a central risk argument.
A fund whose portfolio is not yet known when you come in — you are buying the strategy and the team. Secondaries are the opposite: there you can see what is in the portfolio.
The request to investors in closed-end funds to pay in the capital they have committed. Semi-liquid funds do not work that way — there the full amount is invested straight away.
The typical return path of closed-end funds: negative at first, because costs arise before income, rising later on. Evergreens dampen the effect, because they come into portfolios that are already at work.
Loss of return caused by liquidity that is held ready but not invested. The price of a semi-liquid fund having to be able to meet redemptions.
Putting the money raised to work. How quickly a fund gets its capital working helps determine the return in the early years.
Capital committed but not yet invested across the market. High levels signal pressure to invest and influence the prices paid for companies.
When equities and bonds fall, the share of private markets in a portfolio rises above the target allocation on paper — investors then sell fund interests on the secondary market, often at a discount.
The price discount to the most recently determined net asset value at which fund interests change hands on the secondary market. It compensates for the age of the valuation, the residual risk and the capital lock-up.
Deferral of the purchase price: part of it is only paid later. That lifts the nominal price but lowers the present value — which is why pricing figures are not readily comparable.
Minority stakes in growing companies that are usually already profitable. Less risky than venture capital, more dynamic than buyout.
A single loan that combines senior and subordinated tranches at a blended rate. Convenient for the borrower, medium risk for the investor.
Loans that are served first in an insolvency and are additionally backed by collateral — the lowest-risk tier and the backbone of most private credit funds.
Claims that are only served after the senior creditors have been paid. Higher interest as compensation for the higher risk of default.
Interest that is not paid in cash but added to the loan amount. A rising PIK share shows that income has been recognised but not yet actually received.
A loan on which interest is no longer recognised because the borrower is not paying. The non-accrual rate is the most honest early indicator of a portfolio’s credit quality.
A contractual undertaking in a loan agreement, for example on leverage limits. It gives the lender an early right to intervene — where such clauses are missing, the loan is called covenant-lite.
The interest margin above the reference rate. It is the actual risk premium on a loan — and the figure worth keeping an eye on over time.
Loans secured against specific assets — machinery, receivables, property. If the loan defaults, there is something tangible behind it.
Loans to young, growing companies, often alongside venture capital. Higher interest, but little substance as collateral.
Loans to, or stakes in, companies in difficulty. High return potential with a correspondingly speculative risk profile.
The default rate measures what share of the loans becomes non-performing; the recovery rate, how much of that flows back in the end. Only the two together give the actual loss.
The loan amount in relation to the value of the collateral. The lower it is, the bigger the buffer before a fall in value reaches the lender.
The usual risk ladder for real assets: core means finished, let properties with stable income, value-add those needing development work, opportunistic projects with the highest risk and the highest return expectation.
A remuneration model in infrastructure: payment is for an asset being available, not for the use actually made of it. That makes income independent of demand.
The time-limited right to operate an infrastructure asset and earn revenue from it. When it expires the cash flow ends — which is why the remaining term belongs in every valuation.
The concern that retail products mainly attract the transactions institutional investors did not want. You can test it against where the deals come from and whether parallel vehicles share the same investments.
The smallest amount with which you can come in. Today it ranges from EUR 1 to six-figure sums.
The total assets managed in the fund (assets under management). Larger funds are often more broadly diversified and more liquid.
Accumulating = income is reinvested in the fund; distributing = income is paid out. It determines whether you receive regular payouts.
The option of paying in a fixed amount regularly (e.g. monthly) instead of a single lump sum.
The performance since the fund started, usually stated per year. With young funds it is only of limited value.
Because there is no market price, the value of private assets is estimated by calculation — regularly, but smoothed and lagging reality.
The money-weighted return: it takes account of when how much money flowed. Meaningful for closed-end funds, but sensitive to early distributions and credit lines — and it says nothing about the absolute gain.
Multiple on Invested Capital: the multiple of the capital deployed, with no time dimension. 1.8x means one euro turned into €1.80 — whether in three years or in ten, the figure does not say.
Total Value to Paid-In: distributions plus current value in relation to the capital paid in. The total-value multiple — but it still contains unrealised valuations.
Distributions to Paid-In: the share of the capital paid in that has actually flowed back. The hardest figure of them all, because it counts only realised money.
Residual Value to Paid-In: the valued residual still sitting in the fund in relation to the money paid in. TVPI is the sum of DPI and RVPI.
The form of return that neutralises inflows and outflows and so measures the manager’s performance alone. This is the figure you find in the factsheet of an evergreen fund.
A return that factors in the size and the timing of the cash flows — IRR is its best-known representative. It describes your result, not the performance of the fund.
An approximation method for the time-weighted return that weights cash inflows pro rata by time. It is often used where daily valuations are not available.
A comparison method that invests the same cash flows in an equity index and nets the two off. The fairest answer to the question of whether private markets have paid off against the stock market.
A credit line with which a fund pre-finances investments before it calls capital. It shortens the capital lock-up and lifts the reported IRR, without the portfolio having become any better.
The estimated price a buyer would pay today. The basis of every NAV calculation for unlisted assets — a reasoned estimate, not an observed market price.
The valuation hierarchy used in accounting: Level 1 is exchange prices, Level 2 derived market data, Level 3 model values based on the firm’s own assumptions. Private markets assets are almost always Level 3.
The international accounting standard for fair-value measurement. It defines the valuation hierarchy and calls for the price a sale would achieve today.
The industry standard for valuing private equity holdings. They set out which methods are to be applied when, and so create comparability between managers.
Valuation using comparable figures from listed companies or from comparable sales — the multiple of operating profit, for example. The most common method for company holdings.
Valuation via discounted future cash flows. The discount rate is the decisive lever here — small changes move the value considerably.
The standard appraisal method for property in Germany: the value follows from the rental income that can sustainably be achieved. Internationally, valuation to the RICS standard is its equivalent.
The statistical effect that estimated values react more slowly than market prices: valuations are made with a lag and take their bearings from the previous value. The volatility does not disappear as a result, it only becomes visible later.
A calculated correction for smoothing, in order to arrive at more realistic risk figures. Without it, private markets assets look less volatile in portfolio models than they are economically.
A critical term (coined by Cliff Asness) for the way infrequent model valuations make fluctuations disappear from view. What is meant is a measurement effect, not manipulation — one that distorts portfolio figures all the same.
The German rulebook for taxing fund investments. Whether an ELTIF falls under it, and which partial tax exemption applies, depends on its structure and its fund rules.
The flat German tax on investment income of 25%, plus solidarity surcharge and, where applicable, church tax. Your custodian bank normally deducts it automatically.
The annual German tax-free allowance for investment income. An exemption order (Freistellungsauftrag) with your custodian bank makes sure it is actually used — otherwise tax is deducted in full to begin with.
An annual minimum tax on accumulating funds in Germany: even without a distribution, a notional minimum return is taxed. The tax is debited from your settlement account — which should therefore hold a credit balance.
The calculation base for the Vorabpauschale: the redemption price at the start of the year multiplied by 70% of the base rate. The Vorabpauschale is capped at the actual increase in value over the year.
The interest rate published each year by the German Federal Ministry of Finance (BMF), from which the base return is derived. If it rises, so does the Vorabpauschale.
A tax-free share of the income, meant to offset the tax the fund already pays at its own level. The amount and the entitlement depend on how the fund invests — for many ELTIFs it is nil.
The share of the fund assets permanently held in equities and comparable equity participations. It determines the German partial tax exemption — loan receivables do not count towards it.
A fund that reports the data needed for German taxation. Where that data is missing, a flat-rate substitute assessment can apply, which usually works out less favourably for investors.
Tax withheld in the country in which the income arises. At fund level it reduces the return, without being separately visible to the retail investor.