Fiera Capital (FSZ) Q3 2024 earnings summary

Executive summary

• Assets under management (AUM) rose 4% to $165.5B in Q3 2024, driven by favorable market conditions, new mandates, and positive net organic growth in both public (excluding PineStone) and private markets.

• Private Markets AUM grew 2.1% to $19.5B, supported by $400M in new subscriptions and market appreciation; Public Markets AUM increased 4.5% to $146.0B, with net outflows from PineStone but net inflows elsewhere.

• Private wealth AUM increased by $200M to $14.3B, with new mandates and deepening relationships, especially with First Nations clients.

• Year-to-date, Private Markets contributed 34% of total revenue, up from 32% last year, reflecting a strategic focus on this segment.

• Investment performance remained strong, with 89% of equity and 97% of fixed income AUM in Public Markets outperforming benchmarks over five years.

Financial highlights

• Q3 2024 revenue was $171.7M, up 8% year-over-year, with Private Markets revenues up 17% and Public Markets up 4%.

• Adjusted EBITDA was $51.7M, up 18% year-over-year, with a margin of 30.1% (up from 27.7%); adjusted net earnings were $28.9M ($0.25 per share).

• Net earnings attributable to shareholders were $12.6M in Q3, up from $11M last year.

• LTM free cash flow was $95M, comfortably above dividends paid.

• Base management fees rose 5% year-over-year to over $154M in Q3; average fee rate improved to 37.3 basis points.

Outlook and guidance

• Positive momentum expected to continue into Q4, with a strong pipeline of mandates and increased investor interest in fixed income and alternative strategies as cash rates decline.

• Management expects continued growth in Private Markets, especially real assets, supported by favorable macroeconomic trends such as declining interest rates and inflation.

• Committed, undeployed capital of $1.4B in Private Markets provides a strong pipeline for future growth.

• Performance fees, particularly from agriculture strategies, are expected to become a more regular contributor to earnings.