Fiera Capital Navigates Headwinds with Private Markets Growth Amid Public Market Volatility

Fiera Capital Corporation (FRRPF) reported a challenging start to 2025, as its Q1 results highlighted a $5.5 billion decline in total assets under management (AUM) and a sharp drop in revenue. Yet, the Canadian asset manager also showcased resilience in its private markets segment, which grew by $1.4 billion despite broader market turbulence. This mixed performance underscores Fiera’s strategic pivot toward alternatives and real assets—a move that could position it to weather volatility but also raises questions about its ability to stabilize core business metrics.

The AUM Divergence: Private Gains vs. Public Losses

Fiera’s AUM fell to $165.2 billion as of March 31, 2025, driven entirely by a $7.0 billion contraction in its Public Markets division. The decline stemmed from net organic outflows of $6.5 billion, partly linked to the loss of mandates from Canoe Financial LP, and unfavorable market impacts of $0.4 billion. Meanwhile, Private Markets AUM rose by $1.4 billion, fueled by the acquisition of a real estate platform ($0.9 billion), new mandates in Agriculture and Real Estate in EMEA ($0.5 billion), and market gains.

This divergence reflects Fiera’s long-term strategy to shift toward less volatile, fee-driven private assets. CEO Jean-Guy Desjardins emphasized that private credit and real assets—such as the newly acquired real estate platform—are “inflation hedges” and “operationally resilient,” a theme that resonates amid global economic uncertainty.

Revenue and Profitability Pressures

The AUM decline translated to a significant hit on Fiera’s top line. Revenue dropped 11.5% quarter-over-quarter to $162.9 million, with performance fees and transaction fees down sharply. Compared to Q1 2024, revenue fell 3.1%, driven by lower share-of-earnings from joint ventures and a 22% year-over-year drop in performance fees.

Adjusted EBITDA fell 18.7% sequentially to $43.4 million, though management noted cost discipline: sub-advisory fees and compensation costs were trimmed. Net earnings, however, rose to $21.8 million due to a $12.7 million gain from the real estate acquisition and reduced foreign exchange losses.

The Dividend Cut: A Strategic Shift to Liquidity

Fiera’s decision to slash its quarterly dividend by over 50% to $0.108 per share drew immediate attention. CFO Lucas Pontillo framed it as a move to preserve financial flexibility for “share buybacks, strategic growth initiatives, and deleveraging.” With long-term free cash flow dipping slightly to $86.7 million (though up 20.8% year-over-year), the company aims to prioritize capital allocation in a “volatile macroeconomic environment.”

Risks and Opportunities Ahead

Fiera faces headwinds in its Public Markets division, where client retention remains a concern. The loss of Canoe’s mandates—a $1.5 billion outflow in late 2024—continues to weigh. Meanwhile, the Private Markets division’s growth, while encouraging, is still smaller in scale, representing only 41% of total AUM as of Q1 2025.

Conclusion: A Steady Hand in Uncertain Waters?

Fiera’s Q1 results are a tale of two businesses. Its Public Markets division, reliant on volatile equity and fixed-income markets, is under pressure, while its Private Markets unit shows promise. The dividend cut and focus on liquidity suggest management is prioritizing stability over short-term returns—a prudent move if macroeconomic risks materialize.

Crucially, Fiera’s net organic growth of ~$550 million (excluding PineStone-related flows) hints at underlying demand for its services. The $1.4 billion Private Markets expansion also aligns with industry trends favoring alternatives, which now account for 18% of global institutional assets, up from 12% a decade ago.

Investors should monitor two key metrics: whether Fiera can stabilize Public Markets AUM amid client churn and whether Private Markets growth can offset revenue declines. With $86.7 million in LTM free cash flow and a strengthened balance sheet, Fiera appears positioned to weather the storm—if its private bets pay off. For now, the path forward is clear: double down on resilience, cut costs, and bet on assets that thrive when traditional markets falter.