Fiera Capital Q2 2025 slides: Private Markets shine amid overall AUM decline

Fiera Capital (TSX:FSZ) reported mixed Q2 2025 results, with assets under management (AUM) declining 0.7% quarter-over-quarter to $160.5 billion and total revenues missing estimates at $163 million, down 1% year-over-year. However, the firm demonstrated improved profitability, with adjusted EBITDA rising 1% to $45.7 million and adjusted EPS of $0.24 significantly beating analyst expectations. This profitability was largely driven by robust growth in its Private Markets segment, which saw revenues increase by $7 million and now constitutes 29% of total revenues, alongside strong fixed income investment performance and cost management, positioning the company for future growth despite AUM headwinds.

Analysis

Fiera Capital's Q2 2025 results present a mixed but strategically coherent picture, characterized by operational discipline offsetting top-line pressures. The firm reported a 0.7% quarter-over-quarter decline in assets under management (AUM) to $160.5 billion and a 1% year-over-year revenue decrease to $163.0 million, missing analyst estimates. However, this was counterbalanced by a significant outperformance on profitability, with adjusted EPS of $0.24 soundly beating the $0.18 consensus, and the adjusted EBITDA margin expanding to 28%. This divergence is explained by the firm's successful strategic pivot towards its Private Markets division, which saw revenues grow by $7 million to $63 million and now constitutes 29% of total revenue, effectively mitigating the $8 million revenue decline in the Public Markets segment. The firm's fundamental strength is further evidenced by strong investment performance, with 89% of fixed income AUM outperforming its benchmark on a 5-year basis, and shareholder-friendly capital allocation, including the repurchase of 1.1 million shares. Management's forward-looking strategy is focused on leveraging the high-growth Private Markets platform and achieving a 30% EBITDA margin, signaling a clear path to navigate industry-wide AUM challenges.

Key Decisions for Investors

• Investors should evaluate Fiera's strategic shift, weighing the persistent AUM outflows and a 1% YoY revenue decline against the firm's rising profitability and the robust growth of its Private Markets segment.
• The combination of a 5.64% dividend yield and an active share repurchase program presents a compelling case for income-oriented investors, though the sustainability of these returns hinges on the firm stabilizing its overall AUM base.
• Key metrics to monitor for a long position are the AUM trajectory, particularly any slowdown in public market outflows, and the company's progress toward its 30% adjusted EBITDA margin target.
• Given the stock's 27.56% year-to-date return, prospective buyers should consider whether the market has already priced in the successful execution of its Private Markets growth strategy.