Greek Government Bonds (GGBs)
Transformational Investment
(Code Name: Delta Force)


One of the largest private owners of Greek government bonds (GGBs), improved Greek government public financial management and launched a $3.8 billion (€2.9 billion) unmodified Dutch auction tender offer for select GGBs.


With GGBs, Japonica discovered systemic misconceptions related to the world believing that Greece sovereign bonds were justifiably rated close to D but based on our research merited an investment grade rating, discovered a massive undervaluation with the GGBs trading in the low teens but with a fair value in the mid-80s, and assembled a superstructure team exceeding 230 best in sector professionals to create extraordinary value by correcting the systemic misconception though education and convincing Greek key stakeholders to embrace the best practices of public financial management.

Discovering Systemic Misconceptions

GGBs had the most pervasive and largest systemic misconceptions Japonica had ever discovered as in part a result of the Greece government not having proper financial statements (not even a proper balance sheet) that reflected economic reality in combination with superseding political agendas and almost insurmountable siloed fiefdoms within key stakeholders. Balance sheet misconceptions were at the core of a long list of systemic misconceptions, which included but limited to incorrect performance assessment, misleading sector data, misevaluated historical data, non-economic reality balance sheet, non-economic reality income statement, and flawed projections.

Discover Massive Undervaluation

Discovered a low risk high return massive undervaluation with the GGBs trading in the low teens but with a fair value in the mid-80s, and with a low risk downside scenario indicating at least a doubling of investment in the near term. Of note, Japonica purchased its GGBs from those considered to be among the best and brightest bond investors in the world.

Created Extraordinary Value

Building the largest superstructure team in Japonica’s history exceeding 230 best in sector professionals to create extraordinary value by correcting the systemic misconception through education and convincing Greece key stakeholders, including the Troika and all major Greek political parties, to embrace the best practices of public financial management and a major bond repurchase. Accomplished what was considered impossible by building Greece and peer country government balance sheets by analytical triangulation of over 100 primary and official secondary sources covering up to 20 years of data. See Superstructure Teams example.

Japonica organized major conferences globally that were attended by world leaders that directly challenged the Greece debt myths and educated Greece key stakeholders through free and open debate. The conferences were attended by hundreds including senior individuals across the political spectrum in Greece and Europe. Two of the highest impact conferences were held at CESifo in Munich and the University of Southern California. Additionally, the Japonica team gave hundreds of high impact presentations on public financial management and Greek debt sustainability to organizations including: the American-Hellenic Chamber of Commerce, British Hellenic Chamber of Commerce, CEPS, CIPFA, Economic Council of CDU, EGPA, European Court of Auditors, FEE, Harvard Business School, ICAEW, IIF, IFAC, IMF, INET Oxford, IOBE, ISCTE, London Business School, OECD, PMI Congress, Standard & Poors, and the World Bank.

In recognition of the firm’s expertise, Japonica leadership served as sole Special Advisor to the CEPS Task Force on Government Balance Sheets and received the 2016 William Pitt the Younger Award for extraordinary leadership in strengthening democracy through public financial management.

Education through public media is an important tool for our transformational investments. Japonica consistently and repeatedly went both vertically and horizontally within media organizations from fact checker to editorial boards. For example, our GGB related public service education campaign was both global and micro-focused, and generated more than 3 billion gross impressions.

Investment Performance

The transformational investment in Greek government bonds resulted in an 8.9x investment multiple on capital invested at exit (4.3x on initial funding) and 35% IRR after about 5 years with no leverage. Initial entry price was as low as 11.40 and the average price during the government’s December 2017 liquidity swap was approximately 88. Japonica’s target price for exiting the GGB transformational investment was 85.

The so called cognoscenti believed and espoused publicly that Greece had an impossible to survive amount of government debt and would never even start on the road to best practice PFM.

Contact us

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Japonica is not a fund, does not provide investment advice, but does measure its investment track record in accordance with GIPS.