Some of the world's biggest hedge funds are preparing to set up in Athens, a development Bloomberg said on Saturday was the result of a plan Greek officials had been quietly building for almost a year. The goal, according to the news agency, is to put the Greek capital on the global map of capital management.
The government's pitch to wealthy financial professionals rested on a mix of tax predictability, political and economic stability, a favorable climate and a high quality of life. But officials knew the effort needed a big name to gain international credibility.
The Millennium connection
Millennium Management, one of the largest and most strictly regulated hedge funds in the world, was seen as the ideal candidate. Last November, Greece's finance ministry opened talks with the multi-strategy firm to explore the conditions under which it might open an Athens office.
For many watching from abroad, memories of Greece's long debt crisis made Athens an unlikely candidate to become a financial hub. Inside government, the view was different: the lessons of the crisis could now be turned into a competitive advantage, particularly as London-based executives face rising tax burdens amid Britain's worsening public finances.
Vasilis Karatzas, a close adviser to Finance Minister Kyriakos Pierrakakis who worked behind the scenes on the effort, said Greece was fiscally healthy, produced steady surpluses, and as a result offered tax predictability and macroeconomic stability.
Greece's tax advantage
Predictability matters most to wealthy professionals weighing relocation, since those moving their lives and tax residency abroad want assurance the rules will not change soon after they arrive.
Milan has already had success drawing wealthy residents from London. But Italy's flat tax on foreign income, which started at 100,000 euros in 2017, has since been raised twice and now stands at 300,000 euros a year. Greece, by contrast, has kept its equivalent threshold steady at 100,000 euros since it was introduced in late 2019.
To attract large, tightly regulated hedge funds capable of reshaping old stereotypes about the Greek economy, the government judged it needed to go a step further.
New tax rules for fund managers
Over the following months, officials drafted a new legal framework for taxing hedge funds, designed to make it easier and more attractive for them to set up in Athens. Under the new rules, fund managers who move their tax residency to Greece will be taxed at a 5% rate on carried interest and bonuses.
The issue is politically sensitive, with Greece less than a year from elections and part of the opposition accusing the government of trying to build a "tax haven." Karatzas rejected the characterization, saying Greece did not want to become a tax haven, and that firms setting up in Athens, as well as their employees, would be taxed normally. He said the aim was to create high-quality jobs, attract specialized executives, bring expatriate Greeks home and build a new financial ecosystem.
Middle East shifts the map
As the finance ministry prepared the tax framework, the migration ministry worked to simplify the procedures for people relocating to Greece.
Around the same time, the war between the United States and Iran and the retaliation in the United Arab Emirates changed the calculus for one of the strongest rivals to traditional financial centers. In previous years, traders and their families had moved to the Middle East in large numbers, drawn by low taxes, security, sunshine and a high standard of living, according to Jason Kennedy, head of a recruitment firm specializing in hedge funds.
Kennedy said that once security became a source of concern, several professionals no longer wanted to return or began weighing alternative destinations. Even so, the financial centers of Abu Dhabi and Dubai continue to grow, and the region's large investment funds remain a significant source of financing for hedge funds.
Millennium and Rokos put Athens on the map
Greece passed the relevant legislative changes in June, and a month later Millennium registered an office in Athens. It was not the only major firm weighing such a move.
In May, the Abu Dhabi Global Market had announced that Rokos Capital Management would open its first office in the emirate. But when its founder, Chris Rokos, decided to leave Britain, he chose Greece rather than the United Arab Emirates.
The move drew the attention of the international financial world to Athens's push to attract top traders and fund managers. Bloomberg said the moves by Rokos and Millennium marked a significant success for Greece while raising concern in London. They also symbolized the country's return to economic normality after a decade-long debt crisis that wiped out about a quarter of Greek GDP and brought the country close to leaving the eurozone.
From crisis to investment grade
Greece's economy has grown faster than many European economies in recent years. Since 2023, the country has regained investment grade status from all the major credit rating agencies, and the Athens stock exchange was recently upgraded again into the developed markets category. Greece now also borrows more cheaply than Italy, France or the United States, reinforcing the narrative of fiscal credibility.
A broader wave of financial executives moving to Greece has not yet materialized. Government officials are instead hoping to use the Millennium and Rokos moves as a magnet for smaller players. Among the firms already considering a move is Elan Capital Management, run by Renos Dimitriou.
Karatzas said the country would not become a wealth hub overnight and that it would take years, adding that officials were there to help the first arrivals, after which the market would do the rest.
Opportunity and obstacles
Dimitris Andriopoulos, vice president and chief executive of the property developer Dimand, said the current moment creates a unique opportunity for the Greek capital. He said that with the war in the Middle East and after Brexit, things have changed, and that Milan has reached its limits, giving Athens its chance to capitalize on the situation.
For that to happen, he said, the city needs to rapidly develop the infrastructure required by an emerging international center of wealth and fund management. Andriopoulos said the biggest challenge today is finding high-standard housing and private schools nearby to meet the needs of executives and their families.
Thanasis Drogosis, head of investment banking at Pantelakis Securities, said the real value of hedge funds settling in Athens lies in the creation of well-paid jobs, the repatriation of Greek talent, and the accumulation of expertise in investing, technology, risk management and professional services.
The longer-term goal, according to those involved, is to build a self-sustaining fund management ecosystem in Athens from which new Greece-based funds could emerge, drawing more international capital and greater investment interest in Greek companies.
