Fiera Capital is an independent investment management firm in Canada. It is a research-driven investment firm deriving revenues from management fees, performance fees, earnings share in joint ventures and associates, and other revenues.
Fiera Capital caters to institutional, financial intermediaries, and private wealth clients across North America, Europe, and key markets in Asia. U.S. and Canada account for nearly 80% of revenue and also constitute the majority of assets under management. The firm has more than $180 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%).
Key Investment Data
- Opportunity Score: 44
- Ticker: TSE:FSZ
- Sector: Financial Services
- Industry: Asset Management
- Market Cap: 0.91B
- P/E: 141.80
- Dividend Yield: 7.58%
- Payout Ratio (TTM): 771.30%
- Canadian Dividend Aristocrat: YES
- Chowder Score: Members Only
- Revenue Growth: Members Only
- Dividend Growth: Members Only
- Dividend Growth Fit: 5/10
- Dividend Income Fit: 4/10
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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 complex investment needs. Fiera is known for providing best-in-class traditional as well as alternative investment solutions that span the established and emerging markets.
Fiera Capital 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. The firm earns ~95% of its revenues from base management (~90%) and performance fees.
Q4 was marked by market appreciation and new mandate wins which led to increases in the assets under management. Fiera continued to win new mandates across equity, fixed income, and private market strategies, as well as multi-asset mandates with a higher average fee. Fiera Capital’s current AUM stands at ~$180 billion. Revenues have grown at 5.8% in the last twelve months.
The base management fees have increased faster registering a growth of 11.2% YoY compared to a ~3% increase in SG&A in FY2020. 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.
Fiera Capital continued to make good progress on the execution of its global operating model and completed the divestitures of Wilkinson Global Asset Management and Bel Air Investment Advisors recently. It implemented various corporate initiatives in the second half of 2020 as well. Fiera’s AUM is expected to decline by $1.7 billion in the first quarter of 2021 in regard to its distribution channels particularly related to the Fiera Capital Emerging Markets Fund.
Dividends
Fiera Capital is a Dividend Aristocrat increasing dividends 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% in 2018. It currently sports 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 repurchases during the last year. Most of Fiera’s revenues comprise fees that 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 delivering consistent performance through all market conditions.
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.
The firm is also investing in expanding its distribution capabilities and gaining traction in sub-advisory segments. It is working towards realigning its global distribution model across each of its client channels and has streamlined U.S. operations. Fiera Capital also acquired a new Global Equity capability which has added $500 million in AUM. The firm delivered a good performance as 96% of fixed income AUM and 87% of equity AUM beat their benchmarks in 2020.
Competition
According to its website, Fiera Capital is the second largest independent publicly-traded asset manager in Canada. Its 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 | 0.47 | 67.35 | 106.23 | 65.41 | 65.41 | 1.02 | 0.0096 | 0.96 | 0.5920 | 4 | 0.52 | 0.0854 | 7 | 5 | Tollbooth - Unregulated | NO | NO | YES | NO | Canada | 1 |
| TSE:IGM | IGM | IGM Financial | Financial Services | Asset Management | 0.38 | 44.03 | 10.52 | 13.03 | 13.03 | 3.38 | 0.0511 | 5.11 | 0.6660 | 4 | 2.25 | 0.0511 | 1 | 5 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:ONEX | ONEX | ONEX Corporation | Financial Services | Asset Management | 0.31 | 95.10 | 8.54 | 3.36 | 3.36 | 0.00 | 0.0042 | 0.42 | 0.0940 | 4 | 0.40 | 0.1629 | 2 | 3 | Consumable - Discretionary | NO | NO | YES | NO | Canada | 1 |
| TSE:CIX | CIX | CI Financial | Financial Services | Asset Management | 0.39 | 22.75 | 4.66 | 10.08 | 10.08 | 2.61 | 0.0316 | 3.16 | 0.3050 | 4 | 0.72 | 0.0316 | 1 | 4 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:BIPC | BIPC | Brookfield Infrastructure Partners | Financial Services | Asset Management | 0.37 | 80.90 | 3.63 | 0.00 | 0.00 | 0.00 | 0.0315 | 3.15 | 0.0000 | 4 | 2.04 | 0.0315 | 1 | 5 | Tollbooth - Unregulated | NO | NO | NO | NO | Canada | 1 |
| TSE:SII | SII | Sprott | Financial Services | Asset Management | 0.31 | 45.98 | 1.18 | 32.57 | 32.57 | 1.48 | 0.0271 | 2.71 | 0.7370 | 4 | 1.00 | 0.0271 | 1 | 3 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
| TSE:FSZ | FSZ | Fiera Capital Corp | Financial Services | Asset Management | 0.44 | 11.08 | 0.91 | 141.80 | 141.80 | 1.52 | 0.0758 | 7.58 | 7.7130 | 4 | 0.84 | 0.1385 | 5 | 4 | Consumable - Discretionary | NO | NO | YES | NO | Canada | 1 |
| TSE:AGF.B | AGF.B | AGF Management | Financial Services | Asset Management | 0.50 | 7.55 | 0.53 | 3.41 | 3.41 | 0.52 | 0.0477 | 4.77 | 0.1420 | 4 | 0.36 | 0.0477 | 1 | 5 | Consumable - Discretionary | NO | NO | NO | NO | Canada | 1 |
Bottom Line
The outlook for global equity markets has improved. Fiera Capital’s expertise across diversified asset classes and innovative and personalized solutions positions it well to 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. Fiera Capital is working on a new global operating model focusing on growth and realizing synergies and is taking proactive steps to expand its footprint.
