Total capital raised for closed ended private equity funds targeting Poland has fallen by 64 percent since 2011, an indication that LPs are slowly moving away from the country.
Legislation changes have dented the investment appetite of local LPs. In particular, pension funds are now discouraged from investing with external managers, as noticed by an analyst from Aegon Pension Fund S.A in a conversation with PEI Research and Analytics. Specifically, the burden of fund manager fees was shifted from the members to the pension fund itself – legislation ‘Amending certain acts for pension payments from funds collected in open pension funds’-which makes private equity fund investments more costly to pension funds.
The macro-economic environment within Poland is another factor. One Polish private equity manager stated that it was particularly difficult to find attractive opportunities in the TMT and healthcare sectors.
However, the falling trend may reverse for the year 2014, considering that there are already two Polish-focused funds in market targeting a combined $350.7 million: Taiga Poland II and Polish Growth Fund of Funds.