Bellevue | Küsnacht, 25.04.2016
Investment strategies focused on family-owned or -run companies are now a fixed part of the asset management landscape. This month ten years ago Bellevue Asset Management launched the very first investment fund in Switzerland focused on entrepreneur-owned companies – BB Entrepreneur Switzerland. Its impressive track record speaks for the success of this strategy.
The quality of any investment asset is revealed in its long-term performance and BB Entrepreneur Switzerland (ISIN CH0023244368) looks back on an impressive 10-year track record. Since its launch on April 4, 2006, this fund focused on family-owned and entrepreneurial companies has gained 72% in value (as of March 31, 2016), fueled by successful stock-picking.
Its benchmark the SPI lags well behind the fund, having advanced by only 34% during the same period. Statistically, only one fifth of all funds manage to outperform their benchmark. According to research data published Lipper/Thomson Reuters, in a comparison with its Swiss peers BB Entrepreneur Switzerland has ranked best-in-class for the past 10 years (Equity Switzerland).
BB Entrepreneur Switzerland has performed particularly well in the current year. Despite the high volatility, it is up 0.4% year-to-date (as of March 31, 2016), which represents an outperformance of 9% to the SPI.
Pioneer in asset management
Itself an entrepreneurial asset management company, Bellevue was quick to recognize the potential and viability of investing in businesses that are family owned. Bellevue’s launch of the BB Entrepreneur Switzerland Fund in 2006 was a pioneering move that offered investors a special investment vehicle for capturing the positive effects a company’s ownership structure can have on its stock market performance. Numerous empirical studies have been conducted in the meantime proving that entrepreneur-owned companies do indeed deliver better results, not least on the stock market.
Continuity instead of short-term maximization of profits
This can be traced to the personal financial commitment of the family owners and their close bond with the company, which engenders a long-term perspective. “Family businesses think in generations, not quarters and that is good for stability,” Lead Portfolio Manager Birgitte Olsen points out. Olsen knows what she’s talking about. In over 300 meetings a year, she and her team get to know exactly how business owners think and act. Entrepreneur-owned companies are characterized by strong balance sheets, lean cost structures, high innovation, a sharp focus on market niches with a highly international approach, and stable customer relationships. “Continuity and operational sustainability come before the short-term maximization of profits,” she adds. A strong sense of responsibility and a natural disinclination to run the company on borrowed money translate into solid balance sheets and greater resistance to external shocks.
Expansion of the entrepreneur strategy
Bellevue has established itself as a provider of entrepreneur funds over the years. The investment universe covered by Olsen and her team was expanded with the launch of BB Entrepreneur Europe in April 2009 and BB Entrepreneur Europe Small in June 2011, which concentrates on small and medium-sized entrepreneurial companies across Europe. All three funds invest in listed companies in which an entrepreneur or a family hold at least 20% of voting rights. Total assets in the Entrepreneur funds managed by Olsen and her team amount to CHF 180 million.
Current environment offers stock-pickers attractive returns
The first few months of 2016 have been turbulent and the rest of the year is likely to remain challenging for investors. Stock markets have correlated rather closely with oil prices lately. Investors are currently rotating out of defensive sectors such as health care and food and into more cyclical sectors such as construction materials and industrials, which Olsen says is one reason for the Swiss market’s recent underperformance. Given its focus on family-owned companies, BB Entrepreneur Switzerland’s investments are well diversified across a top-quality selection of owner-managed businesses, well beyond the index heavyweights on the SPI. Its very strong performance in the first quarter of 2016 can be traced to both successful stock-picking and the underweighting of large cap stocks. More than half of the fund’s assets are invested in small companies with a market cap of less than CHF 2 billion. That will continue to be the right strategy for delivering an above-average return to fund investors over the next 10 years.
For further information:
Bellevue Asset Management AG, Seestrasse 16 / P.O. Box, CH-8700 Kusnacht/Zurich
Tanja Chicherio, Tel. +41 (44) 267 67 09, tch@bellevue.ch
www.bellevue.ch
Bellevue Asset Management
Bellevue Asset Management is an independent and highly specialized asset management boutique focused on managing equity funds for selective sector and regional strategies, in particular for African equities, Swiss/European entrepreneurial equities and healthcare equities, and multi asset strategies.
