Fiera Capital Reports Q2 AUM of $163.5 Billion, Up 2.1%

Fiera Cap (TSX: FSZ ) released second-quarter financial results and hosted an earnings call on Friday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

5 billion, driven by strong market appreciation despite larger-than-expected net outflows, particularly from sub-advised mandates. 5% during the quarter and raising $100 million in new mandates, mainly in real estate and private credit strategies. Base management fees in public markets declined due to lower sub-advised AUM, but adjusted EBITDA margin remained stable at 27% due to cost optimization and reduced SG&A expenses. New strategic initiatives include the appointment of Nick Smart as Lead Portfolio Manager for Canadian Large Cap Equities and the alignment of Private Markets with the firm-wide investment governance model.

The company expects continued growth in private markets, particularly in infrastructure and real estate, and sees private markets as a key driver of long-term value creation. 8 times, expected to decline in the second half of the year. Management highlighted improvements in investment performance across key equity strategies and emphasized the importance of sustaining this momentum for long-term outperformance. Full Transcript OPERATOR Good morning and welcome to the Fiera Cap conference call to discuss financial results for the second quarter of 2026.

I will now turn the conference over to Amin Mousavian, Senior Vice President, Head of Treasury and Investor Relations. You may begin your conference. Amin Mousavian, Senior Vice President, Head of Treasury and Investor Relations Thank you and good morning, everyone. Welcome to the Fiera Cap conference call to discuss our financial and operating results for the second quarter.

com under Investor Relations. This morning we have with us Maxime Menard, Global President and Chief Executive Officer; Lucas Pontillo, Executive Director, Global Chief Financial Officer and Head of Corporate Strategy; and Gabriel Castiglio, Executive Director and Global Chief Operating Officer. Following the opening remarks, we'll have a question-and-answer session. 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 forward-looking statements on page two of the presentation and periodic reports that we have filed with the regulatory authorities. I will now turn the call over. Maxime Menard — President & CEO Good morning and thank you for joining us today. The second quarter was challenging from a flows perspective as we experienced larger-than-expected outflows from our sub-advised mandates along with elevated client rebalancing.

However, we remain focused on executing against our strategic priorities. As a result, we saw positive momentum across several areas of the business, including growth in our private markets platform, continued traction within our key distribution channels and improving investment performance across a number of our flagship strategies. I'll begin with a review of assets under management and flows for the quarter. 1% from the end of the prior quarter.

Strong market appreciation more than offset net outflows. 4% from the prior quarter, as strong market growth was partly offset by net outflows. 2 billion in the quarter, largely due to client rebalancing across both equity and fixed income strategies. During the quarter, we won new mandates and captured net inflows from financial intermediary relationships established within the last 18 months.

Growing exposure to the financial intermediary space continues to support organic growth and a more consistent flow profile. As we announced earlier this week, Nick Smart has been appointed Lead Portfolio Manager, Canadian Large Cap Equities. Nick has previously served as a co-lead of our Canadian Large Cap strategies and has been involved with the flagship strategy since inception, providing continuity of investment knowledge, fundamental research and portfolio oversight.

Nick and his team will be supported by the broader Canadian Equity team, Fiera Cap's Institutional Investment Platform and the governance of our Global Investment Office, which oversees performance, investment risk and resourcing. These changes came on the heels of the action we took which we believe necessary to protect our clients, employees, the firm and the integrity of our investment platform. Our Standards of Professional Conduct apply to everyone at Fiera Cap regardless of seniority or commercial importance. S.

, EMEA and Asia. 5 billion of AUM directly to PineStone in the second half of the year. We continue to expect direct transfers in 2026 to be lower than the prior year. 4% year to date, reflecting net inflows and market appreciation.

We raised close to $100 million in new mandates during the quarter, primarily into our real estate and private credit strategies. Net inflows totaled more than $115 million, which was largely offset by return of capital in our closed-end fund business. During the quarter we launched a note feeder that allows life insurers to access our private credit strategies. This new investment vehicle has been generating good traction and we expect demand will grow over time.

With approximately 20% of our AUM tied to life insurers, we see good opportunity in this space. During the quarter, more than $500 million of capital was deployed into new projects, bringing total deployed capital to $800 million year to date. 9 billion. We also began deploying capital into our Canadian Built Opportunities funds and have expanded the strategy with new clients, which is expected to fund in the third quarter.

We see good opportunity to bring on potential clients over time. In this innovative structure, we continue to view private markets as a key driver of long-term value creation. As part of a strategic plan, during the quarter we aligned Private Markets with the firm-wide investment governance model consistent with the structure established in Public Markets. Under this model, investment teams are aligned under the Global Investment Office, strengthening investment oversight and collaboration.

This change will enable us to fully leverage Fiera Cap's scale and capture multi-asset opportunities across all platforms. Now, taking a look at our Canadian franchise, we are continuing to allocate resources toward growth within the Canadian retail channel through relationships with financial intermediaries. We were recently granted SMA platform approval with a well-known Canadian advisor, which follows last year's SMA platform addition with a prominent Canadian wealth manager. One of our flagship equity strategies was also added to a large Canadian lifeco investment platform during the quarter.

Within our Canadian business, outside of our sub-advised AUM, we continue to see momentum in net organic growth supported by efficient distribution and our multi-strategy platform. Looking outside Canada in EMEA, our integrated fixed income strategies captured net inflows of close to $200 million in the quarter, reflecting our success within the insurance market. Turning to investment performance, we saw meaningful improvement during the quarter across several of our key equity strategies.

Notably, our large cap equity strategies produced strong absolute returns, with most outperforming their respective benchmarks and peers in the period, while continuing to offer competitive results over the long term. Our emerging market strategies delivered another quarter of benchmark outperformance, further building on an impressive track record of top-quartile returns and alpha generation across one-, three- and five-year periods. Despite the recent headwinds and the market-related challenges faced by our quality-focused equity platform over the past few quarters, we are encouraged by the results of the current quarter.

We remain focused on sustaining this momentum and returning to the high standard of long-term outperformance that has historically defined our platform. Within fixed income, our strategies continue to deliver strong absolute and relative performance, with 91% of our fixed income AUM outperforming respective benchmarks over the one-year period. Looking at Private Markets, our real estate core and small-cap industrial funds continue to perform well in the quarter, supporting continued demand for the real estate strategies. Private credit also delivered strong performance, supporting strong client interest in the strategy.

With that, I'll turn the call over to Lucas to walk us through the financials in more detail. Lucas Pontillo — Executive Director & Global Chief Financial Officer Thank you, Maxime, and good morning, everyone. As Maxime acknowledged earlier, we had a challenging second quarter with larger-than-expected outflows. However, we continue to optimize our cost structure on a year-to-date basis.

We were able to offset the revenue headwinds from lower sub-advised AUM through reduced SG&A expenses, resulting in a stable adjusted EBITDA margin. 1 million in the second quarter increased 1% from the prior quarter, reflecting higher commitment and transaction fees and higher performance fees recognized in private markets. This was offset by lower base management fees from public markets, primarily from lower sub-advised AUM. Total revenues were down 5% year over year, largely reflecting lower base management fees in public markets, lower share of earnings in joint ventures, and lower commitment and transaction fees.

Year-to-date, total revenues were down 5%, mostly due to lower base management fees in public markets. 4 million compared to the second quarter of last year. 7 million in the same period last year. 5 million compared to the prior-year quarter due to lower fees earned from real estate strategies from clients in EMEA.

7 million in the prior-year period. 0 million in the same quarter last year. Share of earnings in joint ventures and associates can vary from quarter to quarter as a result of the long-term nature of the underlying joint venture projects with Fiera Real Estate UK. 6 million for the same period last year.

3 million in the same quarter last year. 4 million in the same period last year. Looking more closely at base management fees in private markets, base management fees were $49 million in the second quarter, largely flat compared to both the prior quarter and the same quarter last year. Year-to-date private markets base management fees of $98 million declined slightly from the prior-year period, reflecting a lower fee rate partly offset by higher deployed AUM.

In public markets, base management fees of $96 million declined 2% from the prior quarter, largely due to lower average AUM, while ending AUM increased quarter over quarter. Average AUM was down 1% sequentially due to the timing of significant market volatility in the first and second quarters along with outflows from sub-advised AUM. Year over year, public markets base management fees declined 3%, reflecting a lower base management fee rate primarily due to asset mix as a result of lower sub—advised AUM, partly offset by an increase of our average total AUM.

Year to date, public markets base management fees of $194 million declined 5% from the prior-year period, reflecting a lower base management fee rate primarily due to asset mix shift from lower sub-advised AUM. 5%. The decline in expense reflects cost savings from continued optimization effort along with lower sub-advisory fees. 3% from the prior quarter, primarily due to the timing of variable compensation costs, partly offset by lower sub-advisory fees and professional fees.

7 million in the prior quarter. 9% in the prior quarter. The decline reflects the timing of variable compensation which I previously mentioned, partly offset by higher revenue. 7 million, reflecting lower revenues partly offset by lower SG&A expenses.

4 million from the same period last year. However, as previously highlighted, our adjusted EBITDA margin remained stable at 27%, supported by continued optimization and disciplined cost control. 3 million from the same quarter last year, reflecting lower revenues partly offset by lower SG&A expense and lower interest on long-term debt. 4 million were down 10% from the same period, largely reflecting lower revenues partly offset by lower SG&A excluding share-based comp and lower interest expense.

03 from the same quarter last year. Looking at cash flow and capital allocation, we generated last 12 months free cash flow of $93 million, down $3 million from the prior quarter, primarily due to lower distributions received from joint ventures and higher dividends paid to non-controlling interest. This was largely offset by lower interest paid on long-term debt. Compared to the same period last year, last 12 months free cash flow increased by $18 million.

The increase reflects higher cash from operating activities, primarily from the timing of working capital items, along with lower interest paid on debt and lower lease payments. 9 million. Subsequent to quarter end, we renewed our NCIB to purchase up to 4 million shares over the next 12 months. We continue to believe the shares are significantly undervalued at the current levels.

Dividend payout ratio relative to our last 12 months free cash flow remained steady from the prior quarter at just under 50%. Turning to the balance sheet, net debt ended the quarter at $723 million, up $23 million from the prior quarter. The increase reflects primarily the remaining purchase of the 25% interest in Fiera Infrastructure along with certain other fees. 7 times in the same quarter last year.

We expect net debt to decline in the second half of the year as the first half is usually impacted by higher cash outflows, mainly related to annual bonuses and variable compensation. 8 cents per share, payable on September 17, 2026 to shareholders of record as of August 20. With that, I'll turn the call back to Maxime. Maxime Menard — President & CEO Thank you, Lucas.

We remain focused on driving progress across each pillar of our strategic plan. We continue to shape private markets to be a growth driver by aligning investment teams under the Global Investment Office and expanding solutions that align with evolving client demand. Our distribution efforts are focusing on higher-conviction opportunities, and we are gaining traction on flows through deeper relationships with the financial intermediary partners.