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Surging inflation in the US and Europe was a defining aspect of the 2022 investment year. Central banks in the West were compelled to enact a series of aggressive rate moves to tackle high inflation. Stocks and bonds corrected sharply. In the equity market, small and mid cap stocks showed the biggest losses along with growth stocks. Markets began to regain their footing during the second half of 2022, which also benefited Bellevue strategies.

2022 was a year of major macroeconomic surprises, especially the readouts on GDP growth in the US, which was much more resilient than generally expected. Inflation therefore remained at high levels and was further stoked by the war in Ukraine and the resulting high energy prices, as well as by supply-chain constraints in China. US inflation as measured by the consumer price index peaked at 9.1% in June.

Financial markets have always shown a strong reaction when actual data clearly diverges from consensus forecasts. Early in 2022, the US Federal Reserve predicted that the Fed funds rate would be around 1% at the end of 2022. However, the Fed was compelled to take repeated action over the course of the year in response to the high inflation, as was the European Central Bank (ECB). It announced seven increases in the Fed funds rate last year, bringing it from 0.25% to 4.5%, while the ECB announced four rate hikes, raising its main lending rate from 0% to 2.5%. Against this backdrop, bond and equity markets corrected sharply in 2022.

Source: Bloomberg, Bellevue Asset Management, Duration US Treasury Index 7.67 years, data as at December 31, 2022 

Healthcare – rising interest rates hurt investment performance, initial signs of recovery in second half

Faced with quickly rising interest rates, investors last year flocked to defensive large and mega cap stocks. In the healthcare sector, investors bought up pharmaceutical stocks and large or mega cap stocks in the managed care and biotech subsectors. The Russell 1000 Healthcare Index, which tracks large/mega caps in the healthcare sector, outperformed the small and mid cap Russell 2000 Healthcare Index by a wide margin for a second year in a row. That is a stark contrast to 2020, when the coronavirus broke out and small and mid cap growth stocks significantly outperformed their larger counterparts.

Annualized performance in USD (in %)









Russell 1000 Healthcare


– 4.0%






Russell 2000 Healthcare


– 29.0%


– 17.6%




Bellevue continues to focus primarily on small and mid cap stocks in its healthcare portfolios, as this market segment clearly displays stronger-than-average growth momentum over time. When interest rates are on the rise, however, stocks like these often experience the greatest selling. With the stabilization of mid- and long-term rates during the second half of 2022, our healthcare strategies began to show initial signs of a recovery.

*Launched as of March 31, 2022
Source: Bellevue Group, as at December 31, 2022

BB Biotech’s NAV declined by 12.1% during the year under review. BB Biotech AG shares corrected far more, down 24.3% yoy, and the share premium therefore receded from 28.8% in the previous year to 12.6% at year-end 2022. Among the large core portfolio positions, Neurocrine (+40.2%), Alnylam (+40.1%), Vertex (+31.5%), Ionis (+24.1%), Incyte (+9.4%) and Argenx (+3.9%) made positive contributions, whereas most of the small and mid cap positions in the portfolio delivered clearly negative returns (performance in USD).

The share price of Bellevue Healthcare Trust also had a negative return in 2022, –29.3% in USD (NAV –20.5%). Like many other UK investment companies, Bellevue Healthcare Trust shares showed a discount to NAV (–8.9%) at year-end 2022, compared to a slight premium of 2.6% a year earlier. Many of the stocks in its portfolio are mid cap growth stocks, which is why the strategy underperformed the MSCI World Healthcare Index.

The Bellevue Medtech & Services Fund (–16.8% in USD) managed to beat its benchmark (MSCI IMI Healthcare Equipment & Supplies; –24.8%) by a wide margin. This outperformance is largely attributable to its investments in US health insurance stocks. In 2022, health insurance companies benefited from rising bond yields and from the general preference for US companies that generate most of their sales in the US market given the escalating geopolitical tension. Health insurance stocks are also a good hedge against inflation because fixed reimbursement amounts are arranged for many surgery procedures at the beginning of every year, and they are not revised during the year even if actual costs increase. The Bellevue Digital Health Fund corrected sharply in the first half of 2022 (–38.6%) but bounced back in the second half of the year (+17.4%). Its steady focus on high-growth, commercially successful innovation leaders that are not reliant on external sources of capital paid off.

The Bellevue Asia Pacific Healthcare Fund (–23.2% in USD) and the Bellevue Emerging Markets Healthcare Fund (–18.8% in USD) lost considerable terrain in 2022. Chinese stocks experienced the heaviest selling due to China’s rigid zero-COVID policy and the outcome of its Communist Party Congress, which tightened President Xi’s grip on power, causing some China investors to head for the exits. The government’s easing of zero-COVID restrictions late in the year ushered in an initial recovery.

Regional and multi-asset strategies – every asset class hit by the correction

Both equities and bonds lost considerable value last year. With interest rates quickly rising, fixed-income investments were unable to serve their traditional function during a stock-market downturn. This double decline also pushed the full-year returns of multi-asset strategies into the red. During the 2022 investment year, which produced historically weak returns across all asset classes, there truly was "no place to hide”.

The Swiss stock market can be used as an example to illustrate this point. After delivering double-digit returns in 2021, the two funds Bellevue Entrepreneur Switzerland (+26.7% in CHF) and Bellevue Entrepreneur Swiss Small & Mid (+25.2% in CHF) swung into negative territory in 2022, retreating 24.6% and 28.7% year-on-year. The pan-European equity strategies Bellevue Entrepreneur Europe Small (–22.9% in EUR) and Bellevue Sustainable Entrepreneur Europe (–13.1% in EUR) also showed negative returns. As already mentioned in the global healthcare space, small and mid cap stocks in Bellevue’s regional strategies lagged the performance of their large cap counterparts.

*Only related to liquid investment strategies (excl. Private Equity)
Source: Bellevue Group, as at December 31, 2022

The multi-asset Bellevue Global Macro Fund (–8.9% in EUR) and the fixed-income Bellevue Global Income Fund (–7.2% in EUR) performed much better than the Bloomberg Global Aggregate Bond EUR hedged (–13.3%), an important reference index for such strategies. The Bellevue Option Premium strategy (–8.5% in EUR) launched in 2021, which implements option strategies on the S&P 500, also performed well compared to the S&P 500 Index, especially during the second half of 2022 (+6.3%).

Generally speaking, today’s valuation levels offer great opportunities for active equity investors. Bond-market investments have also become more attractive because of the increase in bond yield levels.

Private Markets – momentum in the private equity business

2022 was another year of expansion for Bellevue Private Markets. Bellevue Entrepreneur Private LP («LP») – an investment vehicle for growth investments in SMEs – completed its final closing at mid-year after raising CHF 63 mn. This private equity fund launched in the first quarter of 2021 has already called 51% of committed capital, which attests to the attractive deal pipeline, and is now invested in seven companies.

Bellevue adbodmer’s deal sourcing activities are focused on themes and trends such as e-mobility that offer growth with little cyclical sensitivity.

In an exclusive transaction conducted in the second half of the year, the adbodmer investor group and the LP acquired an interest in a German company that is the market and technology leader for specialized, electric-powered personal watercraft. They will support the highly profitable company in accelerating its growth strategy and building up its international reach.

In another proprietary transaction, investor group members and the LP invested in an Austrian SME that produces high-performance wire and cable products for electric motors in automobiles, among other applications. The invested funds will be used to expand production capacity to meet the very high demand and capture the structural market growth as a leading high-tech supplier over the long term.

Despite the challenging environment, most of the companies in the LP’s portfolio showed good operating results. The LP’s strategic focus on companies with very solid financial positions and little or no debt was clearly an advantage as interest rates marched higher, considering the considerable turmoil that rising rates caused in the venture capital market.

The approximately 30 members of adbodmer’s exclusive group of investors play a decisive role in realizing the most compelling opportunities sourced through adbodmer’s deal pipeline. Its investor group consists of experienced entrepreneurs (and business families) who can make extremely valuable contributions to an investment target’s value creation processes by virtue of their business networks and their know-how in a diverse range of industries. In 2022, seven more prominent entrepreneur investors were admitted to the investor group.

The strategic expansion of Bellevue Private Markets was also advanced during the past calendar year. In December, an experienced and long-standing private equity secondaries team was recruited for Bellevue Private Markets. The three Managing Partners – Steven Kroese, Lars Honegger and Chris Davies – had previously worked side-by-side in the private equity secondaries market at a leading private equity player for more than 10 years, during which time they gained valuable experience and established a first-class network of contacts. The secondaries market is, by its very nature, an extremely attractive market segment and today’s very attractive environment makes it all the more enticing.

The timing of a fund launch that is focused exclusively on private equity secondaries therefore appears excellent. Bellevue plans to raise USD 200 mn in capital commitments for the first vintage. The Investment Team will focus on the most attractive market segment, consisting of smaller transactions from USD 1 mn to 30 mn and will build an investment portfolio of top-tier fund shares in top-quality small and mid-market buyout managers.

An umbrella fund structure was established in Luxembourg with reputable partners and service providers with the aim of expanding the investor base beyond the borders of Switzerland.

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