Q3 2025 Fiera Capital Corp Earnings Call
Good morning and welcome to Sierra Capital's earnings call.
Financial results for the third quarter of 2025.
To Natalie, medak director investor relations. You may begin your conference
Thank you and good morning, everyone. Welcome to the peer Capital conference. Call to discuss our financial results. For the third quarter of 2025. A copy of today's presentation can be found in the investor relations section of our website comments made on today's call including replies to certain questions May deal with forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ from expectations. Please refer to the
Looking statements on page 2 of the presentation.
Our speakers today are Maxine Menard, Global president and CEO and Lucas pontillo, executive director Global CFO and head of corporate strategy. Also, available to answer questions, will be John, Valentini, president, and CEO private markets with that. I will now turn the call over to Maxine.
Good morning everyone. Thank you for joining us. Today, we are pleased with our operating and financial results for the third quarter of 2025.
Total assets under management increased. 4% to end the quarter at 166.9 billion supported by market appreciation and total, net, organic growth of 900 million
Within our Public Market, platform assets under management reached $145 billion at the end of the third quarter, up 3.9% from the end of Q2, reflecting market growth and positive net flows.
And Assets in our private Market platform ended the quarter third quarter at 22 billion up 5.3%. From the end of the prior quarter reflecting Strong, net inflows of approximately 850 million, along with market growth.
I will now turn to highlights of our commercial and investment performance across our asset classes.
Starting with our Public Market platform.
Total net. Organic growth was 55 million. During the quarter, we secured new mandates of close to 500 million primarily into our us growth Equity, strategy and positive net. Contribution from non-sub of close to 400 million mostly across a mix of our equity and fixed income strategies.
This was largely offset by outflows of approximately 700 million from sub-advised, strategies.
During the quarter, we announced an extension of our partnership with Wellington Altus with the launch of our Canadian corporate bond plus, and investment fund focused primarily on Canadian. Corporate bonds and exclusively available for purchase by Wellington Altus advisors
this mandate joins, the Canadian High convictions Equity strategy, which was announced in the prior quarter. Both mandates are expected to fund over time but carry strong growth potential.
Returning to investment performance in public markets.
Our fixed income strategies continue to perform well in the third quarter with nearly all strategies, adding value, approximately 86% of our fixed income AUM, have outperformed their Benchmark over the 1 year, period and 97% have outperformed over 5 years.
we are pleased to report that Fiera Capital was recognized as fixed income manager of the year at the European Awards, 2025
This recognition reflects the strength of our fixed income platform, along with our leadership and long-standing expertise in the insurance investment space.
Among our Equity strategies outperformance relative to Benchmark was challenged during the quarter.
Well, the performance of a select group of companies continues to create a challenging environment for generating alpha.
Year to date our Canadian Equity strategy, delivered positive returns but performance relative to Benchmark. During the third quarter was impacted by softness and select High conviction. Holdings and limited exposure to outperforming sectors like materials and energy. Nevertheless, the strategy continues to add value since Inception.
Returns on our us Equity, core and Atlas global companies. Strategies, we're also positive for the quarter and year to date. However, outperformance relative to Benchmark, was affected by security selection within a few key sectors. Both strategies continue to outperform since Inception.
Our International all cap ADR strategy. Remained a highlight outperforming its Benchmark by close to 50 basis points in the quarter and 500 basis points.
for the 1 year period, led by strong selection in healthcare,
Among our sub advisable Equity strategies, perform in line with its Benchmark. However us and international Equity were impacted by security selections and financials and Industrials and limited exposure to index leaders. Despite short-term challenges. Each strategy continues to outperform its benchmarks since Inception.
According to our private Market platform net, organic growth was approximately 850 million for the quarter driven by new subscription of more than 900 million.
As we announced during the quarter, we received an initial investment of approximately 800 million from the Canadian District of the United Brotherhood of Carpenters and joiners of America.
And to the newly launched, canadian-built opportunities fund.
The initial commitment is divided, equally between infrastructure and real estate Investments and aims to reach over 1 billion in assets, within 3 years.
The fund as a dual Mandate of generating attractive risk, adjusted Returns on Capital and supporting jobs for union members.
And is a testament to our ability to design and deliver high impact customized investment Solutions.
During the quarter, we return capital of approximately 150 million investors in our private Market strategies and year to date. We have returned capital of more than 500 million dollars.
We also deployed approximately $400 million of capital into new projects during the third quarter and $1.5 billion year to date.
Our pipeline of undeployed committed capital increased to $2.1 billion from $1.3 billion at the end of Q2, reflecting the initial investment into the Canadian built opportunity funds during the quarter.
In September, we announced that we made changes through our Global infrastructure capabilities, to broaden the range of strategies available to institutional investors and strengthen the execution risk and oversight.
After a careful and deliberate process, we appointed Bruno Gilmet as Global Head of Infrastructure.
Bruno oversees, both our infrastructure equity and debt capabilities.
Which manage approximately $5.5 billion in assets and are supported by a team of more than 30 professionals across key global markets.
Bruno brings more than 25 years of experience leading large infrastructure platforms and has held senior investment and governance positions in several public sector institutions, including the Canada Infrastructure Bank, PSP, and CDPQ.
Moving on to investment performance.
Our private Market strategies continue to deliver steady investment performance with key strategies, generating positive returns in the third quarter, and absolute returns of 5 to 10% over the 1 year period.
Private credit strategies in particular performed well in the quarter. Our infrastructure debt fund returned 2.6% in Q3 and produced an internal rate of return of more than 11% since inception. The team completed two investments during the quarter and is on track to complete its remaining capital commitment by late 2025 or early 2026.
Our direct lending opportunities. Fund also returned 2.6% for the quarter and more than 10% over the 1 year period.
The team has tightened underwriting, standards. Keeping leverage at conservative levels to ensure. Borrowers have an adequate flexibility.
Delivered, a solid return of 2.1% and the third quarter supported by earnings growth and free cash flow Generations across core portfolio companies.
Lastly, our Global agriculture strategy returned 1.5% and the Q3 as strong operating results were tempered by challenging commodity environment.
Earnings in private wealth assets under management reached $14 billion. At the end of the third quarter, this represented an increase of 2% from the end of Q2. The quarter was impacted by negative net contributions, largely stemming from treasuries and sub-advised strategies. We continue to view the private wealth business as highly complementary to our public and private market platforms and remain committed to driving sales growth within this key channel.
With that. I will turn it over to Lucas for a review of our financial performance.
Thank you, Maxim, and good morning, everyone.
I will now review the financial results for the third quarter of 2025
Beginning with total revenues.
We're also investment platforms. We generated total revenues of 167 million in the third quarter.
Total revenues were up $4 million quarter over quarter or 3% as a result of higher base management fees in both public and private markets as well as an increase in performance fees in private markets.
Revenues were down 5 million or 3% from the same quarter last year, reflecting lower base management, fees in public markets and lowering commitment and transaction fees in private markets.
This was partly offset by higher base management and performance fees in private markets.
Base management fees of 153 million in the third quarter, were up 5 million or 3% from the previous quarter but down 1% year-over-year.
On a year to date basis based management fees of 4555 million or flat from the same period last year as higher base management, fees and private markets, continue to offset a decline in fees from public markets.
As maximum highlighted.
Quarter, we received an investment of over 800 million.
Opportunities.
Within private markets.
These assets are currently within committed and undeployed capital and are expected to be deployed over time, beginning in the first half of 2026.
With related revenues beginning in the second half of 2026.
Assets are expected to be fully invested within 3 years. As a result, our base management fee rate and the quarter reflects a portion of the impact from the increase in undeployed capital.
I have assets are invested and begin to generate revenues. Our fee rate is to is expected to increase commensurately
turning to Public Market revenues.
Base management fees of 103 million in the third quarter, increased by 4 million over the prior quarter, as a result of net, organic growth and Market appreciation.
Fees management, fees declined by $4 million from the same quarter last year, primarily reflecting lower sub-advised assets under management.
on a year-to-date basis based management fees of 366 million were down to 3% from the same period last year, reflecting lower some advised AU
Performance fees were 200,000 during the quarter down from fees of less than a million and the same quarter last year.
Other revenues of 1.6 million and a quarter were flat compared to the last quarter and down for from 3.7 million in the same quarter last year. As this was largely due to revenue related to an insurance claim in the prior year.
Turning to private markets revenues.
Case management fees of 50 million in the third quarter increased by 600,000 from the prior quarter and were up 3 million or 5% year-over-year.
This increase was primarily driven by us taking a controlling interest in a UK, real estate platform during the first quarter of 2025 along with higher deployed AUM, within our real estate and agricultural mandates.
A year-to-date basis base management fees of 149 million increased 10 million or 7% from the same period last year, offsetting the decline in public. Market-based management fees over the same period.
And then transaction fees of 2 million for the third quarter, compared with fees of 5 million in the prior quarter and 4 million in the same quarter last year.
And reflect lower transaction fees earned from clients.
As some new mandates wandering, the quarter did not generate commitment or transaction fees.
Mormon fees of 7 million during the quarter were 4 million higher quarter over quarter and 2 million higher year-over-year reflecting fees from our Global agricultural Fund in the current quarter.
Related to our UK. Real estate business. We're 1.4 million in the quarter down slightly from the fryer quarter and same as last quarter last year.
Year-to-date basis earnings from joint. Ventures were 6 million compared with 11 million from the same period last year, reflecting income earned from completion of several large construction projects in the prior year. And the fact that the consolidation is now in base management fees of our controlling interest in our UK. Real estate platform.
Or the quarter, private markets comprised 13% of total assets under management and generated 37% of our total revenues.
The private markets platform continues to deliver solid AUM and revenue growth and provide attractive diversification to our overall business.
Turning now to expenses.
Sgna expenses of 117 million excluding share-based comp in the third quarter were down. Slightly quarter over quarter and down 3 million or 3% year-over-year.
With reflecting lower sub advisory fees lower travel expenses and fixed compensation expenses which were partly offset by higher variable compensation due to increased organic growth.
On a year-to-date basis sgna expenses. Excluding share-based compensation, we're down 9 million or 2% for the same period in the prior year, as a result of our ongoing cost management efforts and lower sub advisory fees.
We remain committed to improving our operating efficiency and continue to prudently manage, our expense base.
Turning to adjusted ibida and adjusted ibida margin.
Adjust the debit of, for the quarter was 50 million up, 5 million, or 10% quarter over quarter as increased revenues and decreased sgna, expenses to help Drive margin expansion, for the quarter.
Year-over-year adjusted. EBA was down slightly for the quarter by 1 million as lower revenues were, mostly offset by lower sgna expenses. Excluding shared base count.
Year to date. Adjusted EPA of 139 million was down 3 million or 2% for the same period in the prior year, as lower sgna expenses, excluding shared base comp helped to partly offset lower other revenues, and lower earnings from joint ventures,
Or adjusted evaa margin was just over 30% for the quarter up from 28% in the prior quarter and flat from the same quarter last year.
At earnings, net earnings attributable. To the company shareholders were 6 million or 5 cents per diluted share for the quarter up from 4 million or 3 cents per diluted. Share last quarter as compared with 13 million or 11 cents per diluted share for the same quarter last year.
An adjusted basis: net earnings were $25 million, or $0.23 per diluted share for the quarter.
Compared with 27 million or 24 cents per diluted share last quarter and 29 million or 25 cents per diluted share in the same quarter last year.
Last 12 months 3, free cash flow of 87 million compared favorably with 75 million for the prior quarter.
The increase primarily reflects improved changes in non-cash, working capital for the quarter.
While the last 12-month free cash flow was below the 95 million generated in the LTM period from the prior year. It is important to note that last year's number included over 31 million in public market, performance fees,
For Q4 2023.
Returning to our financial leverage.
Net debt was $680 million at the end of the third quarter, down $33 million from the end of the prior quarter, as we used a portion of higher free cash flow to pay down our credit facility.
We expect net debt to continue to decrease as we prioritize directing a greater share of free cash flow towards debt repayment.
Our net debt ratio declined to 3.5 times in the quarter, from 3.7 times in the prior quarter.
Funded debt ratio as defined by a credit facility declined to 2.9 times from 3 times in the prior quarter.
Delivering value to our shareholders, REM remains a fundamental pillar of our strategy.
During the quarter, we opportunistically purchased approximately 500,000 and 540,000 shares for total consideration of $3.6 million.
On a year-to-date basis. We repurchased 1.6 million, share for total consideration of close to 10 million.
We continue to see significant value in our stock at the current prices.
Lastly, the board has approved a quarterly dividend of 10.8 cents per share.
Payable on December 22nd 2025 to shareholders of record on November 24th, 2025.
For now, turn the call back to Maxim for his closing remarks.
Agrees with the operating and financial results. Results we delivered this quarter as we continue to make progress executing against our strategic priorities.
We continue to grow our private market business, which saw AUM increase by more than 5% in the quarter and close to 12% year-to-date. The positive net organic growth during the quarter was driven by two large mandate wins.
Which we believe are Testament to the strength of our distribution teams and our ability to design and deliver high impact, customized investment Solutions, and reflect the confidence. That clients continue to place in our investment capabilities.
We exercise, good expense control, and generated a 30%. Adjust to the margin. We improved our financial flexibility, paying down our credit facility and reducing our net debt ratio.
And we returned Capital to shareholder through our quarterly dividend and share repurchases.
I will now turn the call back to the operators for questions.
Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star. Followed by 1 on your touchtone phone. It will then hear a prompt that your hand has been raised. And should you wish to decline from the polling process? Please press star followed by 2. If you're using a speaker-phone it will need to lift the handset first before pressing any keys please go ahead and press star 1. Now if you have any questions
First, we will hear from at BMO Capital markets. Please go ahead.
Thank you and good morning. So to Circle back on the, uh, the launch of the Canadian built uh, platform.
There's a lot of talk about new infrastructure projects, uh, by Canadian Trends. So it sounds like the opportunity set is there.
But I think we're all aware. The pace of capital deployment can be lumpy in infrastructure. So I'm wondering what's, what's the uh potential for this uh strategy to scale over time?
the potential for,
Yeah, for for, for the strategy to, to scale over time.
Yeah. Well we uh first of all, let's say uh it's a it's a large mandate. It's the biggest mandate we've ever uh gotten our private markets platform. I think there's a significant opportunity in this uh type of mandate
To continue to grow. Uh, I would also say that we're uh, we're currently also in discussions.
Um, to grow this. Um, this particular mandate in similar mandates
um,
So, I think that there is potential. I think it's, uh,
There is, there is growth potential and uh in in this uh, particular strategy and mandate.
Okay, I can see that, you know, to, to answer more specific. I mean, in terms of our pipeline of similar types of opportunities we are discussing, uh, similar opportunities with different, uh, parties in Canada. So it's, um,
Yes, we do see this as a growth potential.
okay and uh and Lucas, I think you uh you said that you would uh you expect to invest
Uh, this Capital over a 3 year period. Um, have you do, do you have commitments at this point or it's it's more a more in the future.
No, no. So the comment was relative to um the capital commitment that we already have.
So the idea being that it would be deployed over a 3 year period. So starting early next year uh and then you know, likely ramping up in the following year and and following into the third year as well. So it was with respect to the capital that's already been committed. The 800 million we refer to
Okay. Yeah the Mandate carries a good, you know, a good uh Revenue scheme in terms of management fee and also performance fees. So we think it's uh
relative basis, compared to our private markets, uh,
Revenue. I think this is going to be it's going to be a creative.
Yeah, so so so again, like not to extend too much on this, but I, I think what's, what's really interesting again, we were able to come up with uh, a very customized solution for group that was looking for, you know, the capital.
usually is other groups that will join, um,
Uh, as part of other unions and increasing the capital potentially allocated to this. And so we don't yet have a.
Um, you know a number but certainly there's upside potential in in increasing the pool of assets, committed to that solution.
Okay, appreciate the details and uh switching on uh public markets.
Uh, what interests are you seeing for active equity strategies?
um, from uh, from institutional investors, given that we continue
To see, uh, a concentration of market returns.
Yeah, I think the last quarter is is not necessarily indicative of of how much how much interest there is across public markets. Um, in fact, I think we've seen probably the, the, the, the most of Interest across our different strategies in the last 2 quarters, including as I mentioned, a large proportion. That went to an active us large cap, mandate. And again, um, this is, uh, this is probably, um, the largest asset class that typically would would go non-active. So, um, I think the last quarter was, was a difficult 1 for call it high conviction, active managers. Uh but nevertheless, I think in the long run, we've seen an increase appetite for public markets and active managers and specially the managers that
That we, we tend to have, which is high conviction managers. So, you know, whether it's Canadian equities, whether it's, you know, uh, us equities, and even Global, we we've seen a uh, a constant demand in our fees coming in.
And I would just add to that you know, despite the difficulties in the quarter uh when you exclude the sub-advised mandates, we actually had positive net. Organic growth in public markets of almost 800 million
And it was a it was a nice Diversified uh set of new mandates across everything from Canadian Equity to us Equity. Uh, so I say we continue to see good demand from our for our products in the quarter.
Thank you very much.
Thank you. Next question, will be from Jane Lloyd at National Bank, Capital markets, please go ahead.
Yes first uh question just on the uh the cash flows. Um just kind of trying to pick up the note from the uh from the presentation around timing of accounts, receivable timing of the other other items. Can you, uh, can you try to kind of normalize? Some of those, uh, factors and uh, and what kind of contribution that might have had on the, on the increase? In LTM, cash flows.
Thanks Jame. Uh, great question actually. I would say it, uh, I'll reverse it a bit. It actually is quite normalized for the quarter, uh, where we had a significant working capital drag was last year. Uh, so when you compare that 95 million uh versus the 87 million, uh that's where you're seeing the difference.
So we ran a much tighter sort of non-cash working capital turnover this quarter, which I would say is probably more in line with how we should be running it.
And the last year's number got really impacted by 2. Things, I got impacted by large performance fees, as I mentioned in, Q3 2023 at Q4 2023 and then likewise, there was some slippage with the working capital. Um,
Okay, uh, understood and then, uh, in terms of the, uh, the organic growth story. Um, any any insights on, uh, on how Q4 is, uh, shaping up?
Um, again we we continue to see lots of interest for the different asset class. We have again like it's a little early for me to
To say, you know how this is going to look like. Um, you know, I've mentioned that there's a bit of a softness in terms of the performance and some of the strategies. Um, Q Q4 is not necessarily indicative of a lot of decision making within the institutional world, but we're keeping a close eye on flows. Um, but again, as I said so far, it's hard for me to give you any indications of, you know, uh, how this is going. We, it's a mix of some outflows and, and again some positive
Flows in some of the accounts that we recently won. Um, but you know, we're we're keeping a close eye on this.
Yeah. Okay. Thank you.
Thank you. Once again, ladies and gentlemen, if you do have any questions, please press star followed by 1 on your touchtone phone.
Next, we will hear from Graham writing at TD Security's. Please go ahead.
Hi, good morning. Um, some some solid performance fees in the quarter. Um, I think Q4 historically is Big Year for bigger, uh, performance fee.
Part of the part of the year. Um,
Your markets fund. The performance here has been lagging but you've got solid performance on your Emerging Market strategy. So can you give us a feel for sort of
How things are looking in terms of performance fees. Um, given I believe those funds are sort of Fairly material drivers historically
Yeah, thanks for that. You know, indeed, as you said, some of the performance, if it's a bit lopsided, we've got one that is doing quite well and one that is underperforming.
I mean, certainly at this point in the year, you can see where we are lagging a bit, even in terms of the crystallization of some of those performance fees relative to the prior year.
And as things stand, we're not expecting to have, um, the same level. But again, with these things, it's always so volatile. We still have, you know, six weeks to go in the year and the sensitivity, particularly around those Emerging Market strategies. I mean, we've seen it come and go in a matter of weeks at times. So at this stage, we're watching it prudently. But we're certainly more cautious going into Q4 than we would have been historically.
Okay, great. And then, um, I know you've made some changes in leadership at the uh, the private debt interest, or I guess your infrastructure sort of vertical overall. Um, how would you sort of describe sort of the, the changes in your expected to see there? Is this performance focused, uh, distribution focused.
Um, what are you sort of hoping to see come out of that? And, uh, on a second note, I think there are some Redemption requests.
Sort of Legacy. Um, Redemption requests there are those material in nature and how how are you sort of managing through that through that?
Yeah, so uh, the changes that you're referring to is Bruno getting that that we brought in in terms of global head of infrastructure, uh, the goal in that with the strength of the team in terms of our capabilities around what I consider to be probably 1 of the most attractive asset class on the go forward basis.
Um, you know, and and and the point of this is is is a combination of many things. Again, it's the way we approach the client base and the way that we are coordinating between the debt and the equity. So we we decided to bring the 2 asset classes under 1 uh leadership and Bruno had lots of experience on this.
Um, in terms of the queue again, like we're addressing the situation with the combination of making sure that we create the necessary liquidity to address the queue. But also while protecting the uh, you know, performance of the fund,
Okay. That's it for me. Thank you.
Thank you.
And at this time, Natalie Medak, we have no other questions registered. Please proceed.
You'd like to thank everyone for joining us this morning. Please reach out if you have any other questions.
Sylvia with that. We can end the
Thank you, ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time we ask that you, please disconnect your line