Fiera Capital Reports Mixed Q2 Results with Private Market Growth

Fiera Capital Corporation Reports Q2 2024 Earnings: Key Insights on Asset Management

Fiera Capital Corporation, a global asset management firm, has reported a modest decrease in assets under management (AUM) for the second quarter, although the company showed strong revenue growth in its private markets segment, suggesting a positive outlook for the rest of 2024.

Despite a 3.8% decline in AUM from the previous quarter, the firm noted positive net organic growth within private markets and achieved higher-than-expected free cash flow. While revenues from public markets experienced a decline, private market revenues saw a substantial increase. The company is optimistic about future growth, particularly in private equity and real estate sectors.

Key Takeaways:

• Total AUM decreased to $158.9 billion, down 3.8% from the previous quarter.
• Positive net organic growth was observed in private markets, despite outflows from PineStone and fixed income sectors.
• Private market revenues surged by 11% during the quarter and 15% year-over-year.
• Adjusted EBITDA was stable year-over-year, with an improved margin of 27.2%.
• Free cash flow reached $121 million, surpassing targets.
• A quarterly dividend of $0.215 per share was declared, alongside a renewed share buyback program.

Company Outlook:

• Fiera Capital is keeping a close watch on market volatility and anticipates a soft landing for the U.S. economy.
• Expectations for net organic growth remain positive for the latter half of 2024, aided by significant inflows anticipated from new mandates.
• The firm aims to tackle outflows from PineStone and leverage its decentralized business model to stabilize positive net sales.
• A goal of doubling AUM in private markets over the next five years is projected.

Challenges and Opportunities:

• The underperformance of the U.S. equity core strategy was primarily attributed to reduced exposure to technology stocks, with a 3% year-over-year decline in public market revenues.
• Conversely, the Canadian large cap and global equity strategies showed strong performance, with robust growth in agriculture and infrastructure mandates boosting private market revenues.
• Performance fees saw only slight increases, with reductions in commitment and transaction fees noted.

Q&A Highlights:

• Executives emphasized the importance of evaluating year-to-date performance for a clearer picture of financial health.
• A significant $600 million commitment from CDP was part of the quarterly results, indicating strong partner support.
• The firm intends to expand distribution efforts in the U.S. with a fresh focus on building relationships within the consulting community.

In summary, Fiera Capital’s second-quarter results demonstrate a company striving to adapt to market fluctuations while pursuing strategic growth in private markets and reinforcing organizational alignment. The firm’s focus on partnerships and distribution strategies position it well for future performance improvements.