More and more affluent Poles are turning to the market of private debt and equity transactions in search of attractive rates of return, experts from the consulting firm Saski Partners believe. The development of this market is supported by record-low interest rates on deposits and bonds, poor economic conditions on the Warsaw Stock Exchange and restrictive credit policy of banks.
"For some time now, we have been observing a new trend in the ways of multiplying surplus capital by Polish entrepreneurs and the wealthy. They increasingly turn directly to companies and projects in need of financing, looking for higher rates of return. This phenomenon has additionally increased during the pandemic as the market the public sector does not deliver such returns, and the environment of low interest rates is not conducive to investing excess capital in traditional debt instruments or bank deposits," Dominik Olszewski, managing partner from Saski Partners, said in the statement.
He pointed out that until recently Polish entrepreneurs usually invested part of their surplus capital, for example from the sale of business, on the commercial and residential real estate market.
"Thus, they counted on safe and stable rental income or simply on a stable increase in the prices of these assets. Some funds also went to private banking and only a few decided to actively invest in the non-public market, concluding direct transactions with entities needing capital, creating own funds, or focusing their investment activities within the family office,” he indicated.
Currently, the restrictive policy of commercial banks caused by the outbreak of the pandemic is also conducive to concluding transactions on the private market. Banks started to be very cautious about lending to enterprises, and some industries and new investment projects do not have access to loans at all.