Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fiera Capital Corp (FRRPF, Financial) reported a 4% increase in assets under management, reaching $165.5 billion, driven by rising equity and fixed income markets.
- The company achieved positive net organic growth in both public and private markets, with private markets seeing new subscriptions of $400 million.
- Public markets assets under management increased by 6.3 billion or 4.5%, with a significant moderation in outflows.
- Private markets delivered positive net organic growth of approximately $200 million, driven by new mandates in private credit and real estate.
- The company reported strong financial performance with total revenues of $172 million in the third quarter, an 8% increase year over year.
Negative Points
- Despite positive market impacts, public markets experienced net outflows of approximately $400 million, excluding Pine Stone.
- Emerging markets strategies faced challenges due to significant upswings in Chinese markets, impacting performance.
- SG&A expenses increased by 4.4% year over year, driven by higher travel, marketing, and compensation costs.
- Net debt increased by $31 million year over year, although the net debt ratio decreased.
- The company faces uncertainty in predicting performance fees due to market volatility and recent geopolitical events.
Q & A Highlights
Q: What is the estimated expense beta for Fiera Capital Corp, considering market-related growth?
A: Jean-Guy Desjardins, Chairman of the Board and Global CEO, explained that the revenue sharing agreements can range from 20% to 50%, depending on the nature of the revenue. However, he noted that it's challenging to provide a precise estimate as it varies with the type of revenue and its fluctuations.
Q: How is the performance fee outlook shaping up as the year-end approaches?
A: Jean-Guy Desjardins mentioned that despite a strong start to the year, recent volatility, particularly in emerging markets due to the China rebound, has impacted returns. He stated that it's too early to predict the year-end performance fee outcome, but the first half of the year was strong.
Q: Can you elaborate on the increase in new mandate activity post-quarter end?
A: Maxime Menard, President and CEO, highlighted that Fiera Capital has been awarded several large mandates, particularly in Canadian equities and the Atlas mandate. The company is seeing significant interest and success in these areas, with a strong pipeline of unfunded mandates.
Q: What fixed income mandates are seeing stronger demand?
A: Lucas Pontillo, CFO, noted that there is increased demand for less traditional fixed income mandates, such as core plus and multi-sector strategies. The market is looking for more diverse options beyond traditional fixed income.
Q: How is the alternatives business performing, and what is the outlook for new mandates?
A: Jean-Guy Desjardins and Maxime Menard discussed that the alternatives business, particularly in real estate, is seeing strong growth due to favorable macroeconomic conditions. The pipeline for real estate mandates is robust, and the company expects continued growth in private markets, aiming to reach $20 billion in assets under management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
