Bellevue Group's annual result also included a writedown for 2020. The transformation into a pure asset manager is obviously still ongoing. For Bellevue shareholders, the permanent transformation is nevertheless worthwhile.

André Rueegg is a transformation manager: Since he took over the CEO post at Bellevue Group at the beginning of 2016, the financial institution has become a different one. «A pure asset manager,» as Rueegg emphasized on Tuesday at the presentation of the annual results.

Bellevue has wanted to be a financial group focused on recurring income from asset management since 2007. The entire restructuring was slow, bumpy, partly painful, and accompanied by strategic mistakes and repeatedly high write-offs.

Profit: 22 Million – Payout: 54 Million

However, owners and shareholders did not have to live in poverty during all these years. There was always a dividend.

This year was no exception: Bellevue posted an ordinary profit of 22.3 million Swiss francs ($24.4 million), which again included a writeoff. Nevertheless, Bellevue shareholders can look forward to a dividend payout totaling 4 francs per share – a total of almost 54 million francs.

The surplus capital comes from the sale of the bank and the stake in SIX – and is no longer needed for the company now that Bellevue is a pure asset manager. Instead, from the shareholders. Hansjoerg Wyss, who has owned 10 percent of Bellevue since last year, needs the cash flow from the Bellevue dividend for his foundation activities.

A Lot Is Right, Some Is Wrong

Bellevue's business model works. That's evident from the management fee income, which also increased in 2020. In the Corona year, it was 8.4 percent to about 110 million francs.

Rueegg, who like his 100 or so employees is a co-owner of Bellevue Group, has therefore done a lot right – although some things have gone completely wrong. Holding on to the Bank am Bellevue for too long and trying to turn the brokerage house into a wealth manager were bad decisions.

That cost time, jobs, and money. After the exit from the brokerage and corporate finance business, the bank only wrote losses, and there were writeoffs of more than 20 million francs.

Transformation at Starcapital

Still, the bottom line was something for shareholders: the sale of Bank am Bellevue to private banking group Quintet was rewarded this year with the special dividend – about 35 million francs.

After Rueegg had said on Tuesday that the transformation was now complete, he subsequently had to correct this statement somewhat. This is because Bellevue, the asset manager, must also continue to transform itself, adapt to the constantly changing market and competitive conditions, and realign its range of products and services.

This is clearly illustrated by another write-down, which amounted to almost 11 million francs in 2020. It is charged to the goodwill on the German subsidiary Starcapital. This had «sunk a bit» last year, Rueegg noted.

Germany – Country of Distribution

The main problem: Since Peter Huber, the figurehead of Starcapital, left, the assets under management have practically halved. The fund provider manages just 1.4 billion euros – still profitable, as Rueegg added. The second problem: The existing products cannot hold their own in the market and continue to lose customer money.

Bellevue had acquired Starcapital in 2016 for 30 to 40 million francs; for diversification reasons, it was said at the time. Now it is apparent that the fund range does not differentiate itself enough from the mass of offerings. Rueegg wants to «steamroll» the Starcapital funds, focus on a few specialties – and above all strengthen distribution in Germany, where the other Bellevue products are to benefit from the EU license.

Healthcare Is Almost Everything

The CEO believes Bellevue has now reached the point where scaling effects in the business model can now take effect. Around 80 percent of the 12 billion francs in client assets are in healthcare investments, which represent the actual DNA of Bellevue Asset Management.

This is where the music played in 2020. The company achieved increases in value that were in some cases well above the benchmark. It is this healthcare pillar that has carried Bellevue through all the transformation years and made the lavish dividends possible – despite all the loss-making writedowns.