We have been working on investments in Greece since our inception, in 1995. During this time, we have worked through:
The EU subsidy funding boom in Greece, starting with the massive infrastructure and corporate subsidy projects (from EU entry in 1981 onwards);
The Athens Stock Exchange boom and bust (1999-2000);
The entry into the Euro and the asset price inflation that followed;
The public-private partnership boom;
The Greek public debt crisis from 2010 onwards;
Various Greek privatisation efforts;
Private equity and asset restructuring projects;
The 2020-2021 COVID crisis and its impacts on tourism and the economy;
The 2022 Russian invasion of Ukraine.
We take a conservative and skeptical approach towards all aspects of investment advisory and structuring in Greece. Our basic investment thesis and positioning includes;
1. Asset values have rebounded in Greece following the 2010 Greek debt crisis and its nadir in 2015, when Prime Minister Alexis Tsipras drove the country to capital controls. The improving macroeconomic climate since then, and in particular the tourism rebound and the investor-friendly attitude of the Mitsotakis government (2019 - present) have contributed to a rise in property values. While still under-valued compared with many other European locations, the value fundamentals in many areas are now distorted and require careful assessment and management.
2. Asset values notwithstanding, the Greek tax environment is hostile while the Greek public sector remains incapable of basic management and regulatory tasks. In many cases, tangled regulatory processes are a vector for corruption.
3. Operating returns of most Greek companies do not reflect real operating potential. This is particularly the case with Greek hotels.
4. An entire generation of founders and managers is now retiring, and many Greek assets cannot be inherited or operated by the next generation. Capital for renovation and repositioning does not exist, As a result, this is an excellent time to roll up assets.
5. Most Greek business sectors are affected by high seasonality or structural distortions which make achieving full-year profitability difficult.
6. Many Greek investment sectors remain dominated by oligarchs who are capable of using the regulatory machinery against their competitors. Choosing which sector and region to invest in is a critical task.
In implementing investment advisory projects in Greece, we utilise multiple data sources to understand investment performance and potential. This means that qualifying and quantifying assumptions and sensitivities are a key aspect of our work.
We strongly encourage investors in Greece not to take a superficial approach towards investment analysis and modelling. In many respects, Greece is becoming a high price, low-service business environment, and very little should be taken for granted.