In line with trends observed in previous years, assets under management in Poland remained very volatile in 2019 and in the 1st half of 2020. Total assets* went down to PLN 588 billion in H1 2020 and this drop could be attributed to a very weak performance of equity markets impacted by accelerating Covid-19. The extraordinary situation has negatively affected all segments of the AM sector, although this was not equally visible across particular segments, in particular in the case of the 3rd pillar, where strong new inflows more than offset falling valuations. As of June 2020, assets of investment funds** contracted to PLN 281 billion, reserves of insurance companies remained almost unchanged at PLN 148*** billion, second-pillar pension funds plummeted to 132 billion, and third pillar pension assets increased slightly to PLN 27 billion. Overall, the asset management sector remained medium-concentrated with the top four groups: PZU, Aviva, NN, and Ipopema controlling over 52% of the entire market.
the outlook
Overall assets under management in Poland are expected to fall in 2020 but then rebound through 2022. Particularly promising will be the 3rd pillar pension segment where significant new flows will drive AuM regardless of their initial performance. The new legal framework, in force since mid-2019, has mandated employers to enrol their employees and to match employee contributions. A further boost to 3rd pillar assets will be supplied by the final dismantling of 2nd pillar pension funds, expected around 2021-2022, although this is going to be a zero-sum game for the AM sector as a whole. As far as the profitability of asset managers is concerned, the fund management fee cap is a negative element, however, fund managers will intensify their efforts to offset limited revenues by reducing operating costs, increasing the share of passive strategies, and consolidating operations (through M&A).
* Across key categories: Investment funds, Insurance assets, Pension assets (2nd and 3rd pillar); Excluded are bank and structured deposits, equities and bonds held directly by private individuals
** Figures reported by the National Bank
*** Technical reserves of non-life and life insurers, including unit-linked life funds as reported by KNF
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Investment funds and asset management market in Poland, 2020
