Poland set to substantial HNWI growth, Timetric predicts

Research just released by data provider Timetric suggests that Poland’s HNWI sector is set to grow substantially until 2017, as volumes show a substantial growth and recovery pattern.

Prior to 2007, Poland was considered the rising star of Europe, with Polish HNWIs outperforming worldwide HNWI norms. Subsequently however, Timetric notes, its success has waned, with a marked dip in growth.

“The number of HNWIs in Poland decreased by 8.2% between 2007 and 2011, whilst the number of UHNWIs decreased by 21%. Primary factors that contributed to this decline include a 45% decline in the local equity market, a 27% drop in the local residential property market, and a 25.5% depreciation of the local currency against the dollar during the period,” the firm said.

During this period, business interest and fixed-income products recorded the strongest growth for Polish HNWIs, driven by new business formation and a movement to safer asset classes. Equities and real estate registered the weakest performance.

But in 2012 Polish HNWI numbers rose by 11.8%, suggesting a return to pre-2007 HNWI growth. This was primarily fuelled by the strong performance of the local stock market, which rose by 24% during the year.

Timetric’s research supports the notion that Poland’s HNWI class is returning to strong form. Polish HNWI volume is set to grow by 40% to reach 39,687 by 2017, whilst wealth is forecast to grow by 39% to reach US$193 billion.

This projected growth is primarily attributed to the predicted stabilisation of the local stock and property markets, compounded by the local private sector’s boost from consistently strong economic growth. Furthermore, the local private sector will be boosted by consistently strong economic growth and the emergence of a large number of new entrepreneurs, primarily from the telecoms, aerospace and manufacturing sectors.

The top-performing asset class for HNWIs between 2013 and 2017 is forecast to be alternatives, followed by equities and real estate. As a result, there will be a movement away from cash and towards alternatives.

“This shift back towards substantial HNWI growth marks Poland as a key target by foreign players as the core emerging European wealth management market,” Timetric added.

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