This paper presents a new observer design methodology for a time varying actuator FAULT ESTIMATION. A new linear matrix inequality (LMI) design algorithm is developed to tackle the limitations (e.g. equality constraint and robustness problems) of the well known so called fast adaptive FAULT ESTIMATION observer (FAFE). The FAFE is capable of estimating a wide range of time-varying actuator FAULT signals via augmenting the Luenberger-observer by a proportional integral FAULT estimator feedback. Within this framework, the main contribution of this paper is the proposal of new LMI formulation that incorporates the use of L2 norm minimization: (a) to obviate the FAFE equality constraint in order to relax the design algorithm, (b) to ensure robustness against external disturbances, (c) to provide additional degrees of freedom to solve the infeasible optimization problem via assigning different proportional and integral FAULT estimator gains. Finally, a VTOL aircraft simulation example is used to illustrate the effectiveness of the proposed FAFE.