Fiera Capital is an independent investment management firm based in Canada. It is a research-oriented investment firm that generates income from management fees, performance fees, profit sharing in joint ventures and associates, and other income.
Fiera Capital caters to institutional clients, financial intermediaries and private clients in North America, Europe and the major markets in Asia. The United States and Canada account for nearly 80% of sales and also make up most of the assets under management. The company has more than $ 180 billion in assets under management. It offers tailor-made multi-asset solutions for traditional and alternative asset classes.
Fiera Capital has invested much of its investments in fixed income strategies to add diversity to its equity and private equity portfolio. Fixed income accounts for 45% of the company’s total revenue, followed by stocks (44%), alternative strategies (8%) and asset allocation (~ 3%).
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Sales growth and market exposure
With years of experience, Fiera Capital is well positioned to address the constantly evolving investment landscape with its diverse strategies, different platforms, expanded sales channels and a growing global presence. Customers today are looking for sophisticated solutions for their complex investment needs. Fiera is known for providing world class traditional and alternative investment solutions that span established and emerging markets.
Fiera Capital offers its clients a wide variety of options to invest in the growing global markets. Clients prefer Fiera Capital for its integrated platform that offers the scalability, resources and reach of a global wealth manager. It is highly diversified by region, product, and customer. The vast majority of Fiera’s customer base is in North America. The company earns ~ 95% of its income from basic management (~ 90%) and performance fees.
The fourth quarter was marked by market revaluations and new mandate wins, which led to an increase in the assets under management. Fiera continued to win new equity, fixed income and private market strategy mandates, as well as multi-asset mandates with a higher average fee. Fiera Capital’s current AUM is ~ $ 180 billion. Sales have increased by 5.8% in the past twelve months.
Basic management fees have increased faster, growing 11.2% year over year compared to a ~ 3% increase in SG&A expenses in FY 2020. The company has stood the test of time through the pandemic driven by its diverse investment strategies and its prudent capital allocation was triggered. Fiera Capital continues to invest in strengthening and globalizing its technology and operations platforms to further reduce operating costs.
Fiera Capital has continued to make good progress in executing its global business model and has recently completed the divestments of Wilkinson Global Asset Management and Bel Air Investment Advisors. Various corporate initiatives were also implemented in the second half of 2020. Fiera’s AUM is expected to decrease $ 1.7 billion in the first quarter of 2021 across its distribution channels, particularly those related to the Fiera Capital Emerging Markets Fund.
Fiera Capital is a dividend aristocrat who has increased dividends for the past decade at a CAGR greater than 13%. The dividend has been stable over the past few years. The company last increased its dividend by 5% in 2018. It currently boasts a high annual dividend yield of 7.6% and a high payout ratio. Fiera Capital paid more than $ 87 million in dividends and $ 2.9 million in share buybacks last year. Most of Fiera’s revenue consists of recurring and predictable fees that are subject to contractual agreements.
Fiera offers its customers a large platform for different asset types and regions. The company focuses on increasing its market share through diversified investment strategies and achieving consistent performance in all market conditions.
Over the years, Fiera Capital has developed extensive expertise in active and structured Canadian fixed income, Canadian and overseas stocks, asset allocation and nontraditional investment solutions. The company announced a new structure focused on increasing operational efficiency by better aligning its focus on public and private markets as well as private wealth trades.
The company is also investing in expanding its sales capacity and sub-consulting. The company is working to realign its global sales model across each of its customer channels and has streamlined its US operations. Fiera Capital also acquired a new Global Equity role that added $ 500 million to AUM. The company performed well as 96% of Fixed Income AUM and 87% of Equity AUM outperformed their benchmarks in 2020.
According to its website, Fiera Capital is the second largest independent publicly traded asset manager in Canada. The range of innovations, customer orientation and personalized investment solutions is the greatest competitive strength.
Fiera competes with other leading wealth management companies such as CI Financial, IGM Financial, Onex Corporation, AGF Management and Brookfield Infrastructure Partners.
The outlook for global equity markets has improved. Fiera Capital’s expertise across different asset classes and innovative and personalized solutions positions it well to meet the changing investment needs of its clients. The well thought-out investments in new acquisitions further contribute to the diversification of the portfolio via new and alternative investment strategies in different regions and industries. Fiera Capital is working on a new global operating model focused on growth and realizing synergies and is taking proactive steps to expand its presence.
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