Bellevue's assets under management suffered a sharp blow from financial market turmoil, eroding its earnings power.
Assets under management (AuM) at Zurich-based Bellevue fell 33 percent during the first half of the year to 9.6 billion francs from 12.8 billion, which was worse than the bank had expected as early as last month. Net profit for the group fell by 8 million Swiss francs during the first half to 14.3 million, down significantly from the 22.5 million during the first six months of last year.
Bellevue warned in June that ongoing market turmoil will reduce assets under management and its earnings base by 15 to 20 percent over a year-on-year basis, as finews.com reported.
Erosion of Managed Assets
The Swiss asset manager which is heavily specialized in the healthcare sector saw net new money outflows of 326 million francs during the period, representing 2.6 percent of total AuM. Of that total, a 154 million francs outflow was reported for healthcare investment with a further 172 million francs outflow in other investments. Bellevue also noted that part of the outflow stemmed from a product realignment that is nearly completed.
But the biggest drag on AuM was market performance and dividends which were down 2.8 billion francs during the period, Bellevue reported.
On a call following the results, CEO Andre Rueegg said that the valuation of AuM on June 30 came at an unfortunate time, which was just two weeks after the Swiss National Bank hiked interest rates and briefly lowered the market value of AuM by some 400 million francs. He added that since June 30, AuM has recovered by nearly one billion francs.
Healthcare Resiliency
In its outlook, the firm said that the healthcare sector experienced marked contractions since the first half of last year are now showing «initial upward movements», including in Asia. Moreover, the sector has proven to be resilient in the event of a recession, according to Bellevue.
