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Business Report Shareholder letter

Shareholder letter

As a specialized asset manager, Bellevue took advantage of the broadly positive market environment and achieved another significant increase in its net profit. This very good bottom-line result is further proof of Bellevue’s ability to create lasting value for its clients and shareholders.

André Rüegg, Chief Executive Officer, and Veit de Maddalena, Chairman of the Board of Directors

Dear Shareholders,

Despite the ongoing pandemic, global economic activity remained buoyant in 2021, albeit with some regional differences. Stock markets were largely resilient as well and ended the year near record-high levels. Equities were the top-performing asset class for lack of a better alternative, making 2021 a positive investment year. Markets were supported by the sustained expansionary central bank policies, although the signs of a policy reversal did become more visible and that has already had an impact on market developments. Combined with worries about rising inflation, new virus variants and supply chain constraints around the world, this led to an increase in market volatility during the second half of the year and triggered a rotation from growth to value stocks. Meanwhile the global small and mid cap healthcare segment – a primary investment focus of Bellevue – experienced a sharp correction in the fourth quarter, slowing Bellevue's excellent momentum from the preceding months.

Net new money inflows of CHF 1 bn at healthcare strategies – growth of assets under management impacted by second-half market developments to 6.3%.

A recognized investment specialist with core competencies in healthcare, alternative and niche strategies, Bellevue profited from persisting strong demand for healthcare investments in 2021. After a stellar first half with net new money inflows and investment returns clearly exceeding multi-year averages, some of our healthcare strategies experienced sharp drops in momentum and demand in the wake of general market developments. Nevertheless, our healthcare strategies attracted more than CHF 1 bn in new client money. The private equity strategies attracted nearly CHF 90 mn in net new money, while regional and multi-asset strategies showed outflows of about CHF 370 mn. Thanks to the resulting net new money inflow of CHF 722 mn (excl. the wind-down of StarCapital products) and a solid investment performance, overall assets under management increased by 6.3% yoy to CHF 12.8 bn.

Our healthcare strategies attracted more than CHF 1 bn in net new money.

In the healthcare space, Bellevue is focused on small and mid-sized companies that offer stronger growth momentum and high levels of innovation. This has led to attractive investment opportunities that were clearly favored during the past two years until the final quarter of 2021 when a steep correction occurred. Bellevue Medtech & Services, Bellevue Digital Health and BB Healthcare Trust attracted strong demand from investors.

The relatively young private equity business was further expanded during the year under review. The launch of the BB Entrepreneur Private Fund met with strong investor interest, raising CHF 55 mn from family offices and institutional investors that will be used to finance the growth of unlisted small and mid-sized Swiss companies.

In the Group’s third investment category of «selected niche strategies», the Bellevue Entrepreneur Europe Small and the Bellevue Entrepreneur Swiss Small & Mid funds welcomed new investors. Conversely, regional and multi-asset strategies showed renewed outflows. In addition, the systematic and now completed realignment of StarCapital’s product range led to an outflow of CHF 655 mn, most of which was from low-margin investment strategies that lacked clear differentiation.

67% of all assets under management beat their benchmark

Thanks to the solid performance of our investment solutions, we again generated value for the client last year. More than two-thirds of all assets under management beat the benchmark performance during the period under review. An even greater three-quarters of our strategies have outperformed their benchmarks since inception. The Bellevue Medtech & Services (CH) and (Lux) funds delivered above-average absolute returns of 22.6% and 16.8% (in USD) respectively. Both beat their respective benchmarks by almost 2%. The Entrepreneur strategies also took advantage of the market situation and delivered double-digit returns. The Bellevue Entrepreneur Switzerland and Bellevue Entrepreneur Swiss Small & Mid funds ended the year with a performance of 26.7% and 25.2%, beating their benchmarks by 3.3% and 3% (in CHF) respectively.

Product highlights 2021

Stock markets showed little regard for the pandemic at times in 2021 and new record highs were set. Growing inflationary pressure, new virus variants and supply chain constraints around the world eventually led to greater volatility in financial markets. Despite these shifting market dynamics, Bellevue achieved attractive returns for its investors and pleasing results overall.

Consolidated net profit nearly doubles – sustained value for shareholders

We continued to improve our operating performance in 2021 thanks to the significant growth in assets under management from the first half. Fueled by the 27% increase in average assets under management, total operating income rose by approximately 28% to CHF 140.6 mn. Almost all of these revenues are asset-based and recurring (98%), and thus a promising platform for the Group's future growth.

Operating expenses rose by approximately 26% to CHF 80.4 mn. Our entrepreneurial, profit-sharing compensation model for our nearly 100 employees led to a 27% increase in personnel expenses. We achieved another pleasing improvement in the cost/income ratio to 57.2% in this record-breaking year. Due to the realignment of StarCapital’s products, an impairment loss of CHF 2.9 mn was recognized. Resulting in a consolidated net profit of CHF 43.1 mn – almost twice the figure reported for the previous fiscal year.

Dividend 2022


CHF 2.70

In view of the Group’s strong financials and very positive business development, we are maintaining our shareholder-friendly dividend policy, which is primarily based on consolidated net profit and designed to let shareholders also benefit from Bellevue’s business success. The Board of Directors will propose a dividend of CHF 2.70 per share at the Annual General Meeting on March 22, 2022, an increase of 80% from the previous year. The proposed dividend yields 6.6%.

Bellevue's return on equity based on reported net profit and average outstanding equity capital after distribution of the proposed dividend is 38.6%.

Sustainability a central element of our culture – climate-neutral company

Our core values – independent, entrepreneurial and committed – are the cornerstones of our sustainable business practices and a precondition for generating lasting value for our clients and shareholders. We are committed to the UN Principles for Responsible Investment (UN PRI) and continuously adapt our ESG investment guidelines to meet the latest requirements. Our first ESG report based on the UN PRI reporting framework will be published in the summer. Last year we launched our second dedicated ESG strategy, the Bellevue Sustainable Entrepreneur Europe Fund, complementing the Bellevue Sustainable Healthcare Fund launched in 2018.

At the corporate level, we measured our carbon footprint for the first time in 2021. Bellevue offset its carbon emissions by supporting top-quality climate projects in Switzerland and was therefore certified as a climate-neutral organization last year. We aim to reduce our carbon emissions per employee by 30% by 2030.

Optimization of market position in Germany

After the realignment of StarCapital's products, Bellevue is simplifying the organizational structure in Germany and will integrate all of its operations in the country into one organization, Bellevue Asset Management Deutschland. This will entail a relocation to a new office in Frankfurt am Main. Only the Bellevue brand will be used in Bellevue's most important foreign market going forward, enabling the company to take full advantage of its investment expertise and accelerate its business development in Germany. This integration project is expected to be completed by mid-year.

Profitable growth through product innovation and investments in expertise and new markets

Our business results for 2021 demonstrate quite impressively that Bellevue's income and earnings have reached a new level. Driven by our recognized core competencies and our distinctive product portfolio, we intend to accelerate the development of our company. As a House of Investment Ideas, we will steadfastly pursue our claim of “Excellence in Specialty Investments” with innovative concepts that offer current and future clients exclusive access to attractive investment opportunities. Our product pipeline for the current year is already well-filled. At the same time, we continue to invest in the expansion of our international distribution channels and markets and strengthen our investment and sales teams by hiring promising talents, most recently in the Asia-Pacific region. We have bolstered our presence in this growth region. We have also made initial inroads into selected Latin American markets such as Chile and Peru.

Distribution highlights 2021

Bellevue has a strong and steadily growing client base in its domestic Swiss market and its core European markets of Germany and the UK. Its strategic secondary target markets of Austria, Spain, the Benelux and Italy, the most recently established secondary market, are showing dynamic growth. Recently, the market presence in Asia was strengthened.

We look to the future with confidence knowing that our Group is well-positioned as a focused asset manager. However, we are also aware that our business model thrives best when markets are constructive and that there could be some speed bumps going forward, especially in view of the likely phase-out of expansionary monetary policies and today's geopolitical tensions.

Our optimism is underpinned by our employees’ unwavering commitment as they strive to create value for clients and shareholders alike. They give the Bellevue brand its unique profile. On behalf of the Board of Directors and the Group Executive Board, we thank them for their hard work and dedication. We also thank our clients and shareholders, whose trust and loyalty are vital to our success.

Veit de Maddalena

Chairman of the Board of Directors

André Rüegg

Chief Executive Officer

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