Bellevue Group to Broaden Business as Brokerage Income Erodes

Bellevue Group, a Swiss financial boutique, is looking to broaden its income after being hit by the full force of a volatile market in the first six months of the year which eroded brokerage earnings.

Operating profit at Bellevue Group declined to 6.8 million Swiss francs in the first half of this year, a third lower than a year ago, the company said in a statement today. Net profit was 2.8 million. Last year, Bellevue Group had reported a net loss of 15.5 million due to extraordinary write-offs.

Bellevue's investment vehicle BB Biotech last year helped the company with its operative performance. This year, the unit suffered a first-half setback measuring up to a loss of 1.17 billion francs as health-care stock valuations plunged.

Asset Management Woes

Asset management was also negatively affected by market conditions, Bellevue said. Assets under management suffered a negative market impact of about 1 billion francs, performance fees plunged 85 percent to 0.6 million francs and operating results declined by a fifth to 95 million. Still, the Group reported an inflow of 126 million francs in net new assets.

Assets under management reached a total of 6.9 billion francs, up by a third from the end of 2015. The acquisition of StarCapital accounted for much of the growth.

The purchase, which closed on June 6, helps Bellevue Group to diversify and strengthens the company's presence in Germany. StarCapital's full earnings power will become visible in the income statement for the second half, the company said today.

Investment Trust Listing in London

Bellevue Asset Management plans to list a new investment trust on the London Stock Exchange in the second half of the year. The new investment vehicle will cover a global healthcare universe and specifically address local client needs.

Bellevue's Bank reported a drop of income of almost a quarter, driven by the structural and regulatory-driven slowdown in brokerage activities. It had an operating loss of 1.1 million francs.

UBS Banker to the Rescue

«In order to broaden and stabilize the bank's income base, initial action has been taken to establish a wealth management franchise at the bank,» Bellevue said.

The company hired Christian Zenker from UBS and tasked him with the creation of the wealth management at the bank. Zenker was head of wealth management for nordic markets in Europe at UBS. As he builds the new business, the banker will be able to work with internal resources but may also fall back on acquisitions.