We have been working in Greece since our inception, in 1995. During this time, we have worked through:
The EU funding boom in Greece, starting with the massive infrastructure and corporate subsidy projects;
The Athens Stock Exchange boom and bust;
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.
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 reached new lows in Greece, driven by public sector uncertainty and the Greek debt crisis. Together with low asset values, low costs of building materials and services make expansion and renovation a real option.
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 managers is now retiring, and 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 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.