Fiera Capital is an independent investment management firm in Canada. It is a research-driven investment firm deriving revenues from management fees, performance fees, share of earnings in joint ventures and associates, and other revenues.
Fiera Capital caters to institutional, retail, and private wealth clients across North America, Europe, and key markets in Asia. U.S. and Canada accounted for nearly 80% of revenue last year and also constitute the majority of assets under management.
The firm has more than $170 billion in assets under management. It delivers customized multi-asset solutions across traditional and alternative asset classes.
Fiera Capital has invested a major chunk of its investment in fixed income strategies adding diversity from the equity and private equity portfolio. Fixed income accounts for 45% of the firm’s total revenue, followed by equities (44%), alternative strategies (8%), and asset allocation (~3%).
Investment Data- Opportunity Score: 53
- Ticker: TSE:FSZ
- Sector: Financial Services
- Industry: Asset Management
- Market Cap: 0.93B
- P/E: 2070.91
- Dividend Yield: 7.37%
- Payout Ratio (Earnings): 8400.00%
- Canadian Dividend Aristocrat: YES
- Chowder Score: Members Only
- Revenue Growth: Members Only
- Dividend Growth: Members Only
- Dividend Growth Fit: 7/10
- Dividend Income Fit: 7/10
Revenue Growth & Market Exposure
With years of experience under its belt, Fiera Capital is well-positioned to address the continually evolving investment landscape with its multiple strategies, diverse platforms, enhanced distribution channels, and an expanding global footprint.
Today clients are looking for sophisticated solutions to their more complex problems. Fiera is known for providing best in class traditional as well as alternative investment solutions that span the established and emerging markets. Fiera is also focusing on alpha and other new and innovative strategies.
The firm provides its clients with a myriad of options to invest in the growing global markets. Clients prefer Fiera Capital for its integrated platform offering scale, resources, and reach of a global asset manager. It is highly diversified by geographies, products, and clients. The vast majority of Fiera’s client base is located in North America.
Fiera Capital has been growing through acquisitions over the years. Key strategic acquisitions in the past include Apex Capital Management, Aquila, Centria, Larch Lane Advisors, and Charlemagne Capital. It acquired an 80% interest in Palmer Capital, a leading UK focused real estate investment manager in 2019.
This transaction marked Fiera Capital’s first acquisition of a real estate investment management business outside Canada and will aid in launching new real estate strategies offering exposure to the UK and European real estate markets to its clients. Fiera Capital’s revenues have grown at a rate of 37%+ CAGR in the last decade.
Asset-management companies were adversely affected during the pandemic owing to the sell-off in equity markets and increasing volatility. Q3 was marked by continued recovery in global equity markets which led to increases in the assets under management.
A higher AUM further translated into higher base management fees. Fiera Capital’s current AUM stands at ~$178 billion. The firm proved its mettle through the pandemic driven by its diverse investment strategies and prudent capital allocation. Fiera Capital continues to make investments towards strengthening and globalizing its technology and operations platforms to further reduce its operating costs.
Dividends
Fiera Capital is a Canadian Dividend Aristocrat increasing dividends every year for more than the last five consecutive years. It has consistently increased them at a CAGR of more than 13% in the last decade and the dividend has been stable over the past years.
The firm last raised its dividends by 5%. It currently sports a high annual dividend yield of 8%+ and a high payout ratio. Fiera Capital recently paid $21.8 million in dividends and also announced an NCIB during the third quarter of 2020.
Most of Fiera’s revenues comprise of fees which are recurring and predictable in nature and are subject to contractual agreements.
Fiera offers a large platform to its clients across asset types and geographies. It is focusing on growing its market share through diversified performing investment strategies and on delivering consistent performance through all market conditions.
For instance, returns from the traditional core fixed income assets might appear less appealing with bond yields at low levels, however, Fiera’s non-traditional income strategies should lead to better returns for its clients. The firm is also investing in expanding its distribution capabilities and gaining traction in sub-advisory segments.
Over the years, Fiera Capital has acquired extensive expertise in Canadian active and structured fixed income, Canadian and foreign equity, asset allocation, and non-traditional investment solutions. The firm announced a new structure focusing on driving operating efficiencies by better aligning its focus on public and private markets, and private wealth operations.
Competition
According to its website, Fiera Capital is the second largest independent publicly-traded asset manager in Canada. The company’s innovation, client-focus, and personalized investment solutions offerings are its biggest competitive strengths.
Fiera competes with other leading asset management firms like CI Financial, IGM Financial, Onex Corporation, AGF Management, and Brookfield Infrastructure Partners.
| TickerKey | Ticker | Company | Sector | Industry | Score | Quote | Market Cap | P/E | FPE | EPS | Yield Raw | Yield | PayoutRatio | Payments | Dividend | Chowder | GrowthRating | IncomeRating | Tollbooth | Ambassador | Achiever | Aristocrat | King | Country | Graph |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TSE:BAM.A | BAM.A | Brookfield Asset Management | Financial Services | Asset Management | 0.45 | 49.86 | 59.13 | 0.00 | 0.00 | -0.32 | 0.0122 | 1.22 | 1.0000 | 4 | 0.48 | 0.0763 | 6 | 4 | Tollbooth - Unregulated | NO | NO | YES | NO | Canada | 1 |
| TSE:IGM | IGM | IGM Financial | Financial Services | Asset Management | 0.43 | 35.31 | 8.41 | 11.58 | 11.58 | 3.05 | 0.0637 | 6.37 | 0.7377 | 4 | 2.25 | 0.0637 | 2 | 6 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:ONEX | ONEX | ONEX Corporation | Financial Services | Asset Management | 0.46 | 73.75 | 6.68 | 16.18 | 16.18 | 4.56 | 0.0054 | 0.54 | 0.0877 | 4 | 0.40 | 0.1403 | 5 | 5 | Consumable - Discretionary | NO | NO | YES | NO | Canada | 1 |
| TSE:CIX | CIX | CI Financial | Financial Services | Asset Management | 0.49 | 16.21 | 3.43 | 6.87 | 6.87 | 2.36 | 0.0444 | 4.44 | 0.3051 | 4 | 0.72 | 0.0444 | 2 | 6 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:BIPC | BIPC | Brookfield Infrastructure Partners | Financial Services | Asset Management | 0.69 | 82.95 | 2.95 | 0.00 | 0.00 | 0.00 | 0.0329 | 3.29 | 1.0000 | 4 | 2.15 | 0.1250 | 8 | 8 | Tollbooth - Unregulated | YES | YES | NO | NO | Canada | 1 |
| TSE:UNC | UNC | United Corporation | Financial Services | Asset Management | 0.32 | 106.00 | 1.28 | 9.59 | 9.59 | 11.05 | 0.0113 | 1.13 | 0.1086 | 4 | 1.20 | 0.0527 | 1 | 4 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:SII | SII | Sprott | Financial Services | Asset Management | 0.30 | 38.48 | 0.94 | 35.91 | 35.91 | 1.07 | 0.0330 | 3.30 | 1.1868 | 4 | 1.00 | 0.0330 | 1 | 4 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:FSZ | FSZ | Fiera Capital Corp | Financial Services | Asset Management | 0.53 | 11.39 | 0.93 | 2070.91 | 2,070.91 | 0.01 | 0.0737 | 7.37 | 84.0000 | 4 | 0.84 | 0.1803 | 7 | 7 | Consumable - Discretionary | NO | NO | YES | NO | Canada | 1 |
| TSE:AGF.B | AGF.B | AGF Management | Financial Services | Asset Management | 0.47 | 6.15 | 0.44 | 5.68 | 5.68 | 1.08 | 0.0520 | 5.20 | 0.2963 | 4 | 0.32 | 0.0520 | 1 | 6 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
Bottom Line
Fiera Capital’s expertise across diversified asset classes and innovative and personalized solutions address the evolving investment needs of its clients. Its thoughtful investments in new acquisitions further help in diversifying its portfolio across new and alternative investment strategies across different geographies and verticals.
A compelling outlook for global equity markets, robust recovery of the Canadian economy, and rebound in the US, European and Chinese markets act as strong tailwinds for Fiera Capital.
