Fiera Capital’s Leadership Transition: A Turning Point for the Asset Manager?

Fiera Capital Corporation (TSX: FI.CA) faces a critical juncture as Jean-Guy Desjardins, its founder and longtime CEO, steps down for the second time to assume the role of executive chair and head of global asset allocation. Effective July 1, 2024, the baton passes to Maxime Ménard, previously president and CEO of Fiera Canada and global private wealth. This transition comes amid significant headwinds for the firm, including declining assets under management (AUM), institutional outflows, and a plummeting share price.

A Turbulent Backstory

The leadership shift follows a period of upheaval at Fiera. In 2023, former CEO Jean-Philippe Lemay’s abrupt departure triggered Desjardins’ temporary return to the CEO role—a move now deemed unsustainable as the firm grapples with deeper structural challenges. Key issues include:
- Declining AUM: Assets fell to $161 billion by April 2024 from $170 billion in 2020, driven by institutional redemptions.
- Client Losses: Notably, Canoe Financial LP withdrew $5.5 billion in early 2024, relocating to PineStone Asset Management.
- Share Price Drop: Fiera’s stock closed at $6.55 on the Toronto Stock Exchange in January 2024—nearly half its pre-pandemic peak of $13.02 in January 2020.

Ménard’s Strategic Playbook

Ménard’s mandate is clear: stabilize Fiera’s operations and reverse its downward trajectory. His immediate actions include:
1. Structural Overhaul: Eliminating the chief investment officer (CIO) role, with portfolio managers now reporting directly to him and Desjardins. This aims to streamline decision-making and reduce operational friction.
2. Focus on Institutional Clients: Targeting retention and growth of institutional relationships, particularly after losses to rivals like Montrusco Bolton Investments.
3. Global Expansion: Opening offices in Abu Dhabi and Switzerland to bolster international presence.
4. ESG Integration: Leveraging its 2023 Climate Report and GRESB Green Star status to attract sustainability-focused investors.

Key Challenges Ahead

Despite the strategic shifts, hurdles remain:
- Outflow Management: Fiera must stem redemptions from large institutional clients, such as the $1.2 billion lost to Montrusco Bolton in 2024.
- Ownership Consolidation: Ménard’s plan to acquire Desjardins Financial Holdings Inc.’s 7.26 million shares aims to solidify internal ownership and align incentives with long-term growth.
- Competitive Landscape: Fiera faces stiff competition from global asset managers, particularly in ESG-focused sectors where rivals are aggressively expanding.

Market Reaction and Investor Sentiment

Investors will scrutinize Fiera’s ability to execute Ménard’s vision. Key metrics to watch include:
- AUM Growth: Can Fiera reverse the 5% decline since 2020?
- Share Price Recovery: Will the stock rebound from its 50% drop since 2020?
- Institutional Inflows: Will Fiera regain trust after high-profile client losses?

Conclusion: A High-Stakes Gamble

Fiera’s transition to Ménard represents both a reset and a risk. The firm’s fate hinges on his ability to stabilize institutional relationships, capitalize on global expansion opportunities, and rebuild investor confidence. While the elimination of the CIO role and ownership consolidation signal a commitment to decisive action, the road ahead is fraught with obstacles.

Historical data underscores the urgency:
- Fiera’s AUM has dropped by $9 billion since 2020.
- Its stock price has underperformed peers by nearly 30% over the same period.
- Institutional outflows now exceed $6.7 billion in the past year alone.

Should Ménard succeed in reversing these trends, Fiera could reclaim its position as a competitive player in asset management. Failure, however, could deepen its struggles and deter investor confidence further. For now, the market’s verdict rests on execution—a high-stakes gamble with billions at stake.

Investors would be wise to monitor Fiera’s AUM recovery, institutional inflows, and stock performance over the next 12–18 months to gauge the success of this pivotal leadership shift.