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Professional investor

A professional investor is treated as a professional client under MiFID II and receives fewer protections than a retail investor. An ELTIF sold only to professionals may borrow up to 100 % of its NAV.

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Short answerA professional investor is treated as a professional client under MiFID II and receives fewer protections than a retail investor. An ELTIF sold only to professionals may borrow up to 100 % of its NAV.

A professional investor is an investor treated as a professional client under MiFID II, such as a regulated financial institution, a large company or an individual who meets the conditions to be treated as professional on request.

Why it matters

Professional investors are assumed to have the experience and knowledge to assess risks themselves, so they receive fewer protections than retail investors. Under ELTIF 2.0, an ELTIF marketed solely to professional investors may borrow up to 100 % of its net asset value, compared with 50 % for an ELTIF that can be offered to retail investors.

What to watch for

Asking to be treated as professional means giving up some protections, so do it only if you understand the consequences. Funds open only to professional investors may use more leverage and offer fewer safeguards. See retail investor and leverage.

Primary sources

General information. Not investment advice or a suitability assessment.

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