Fiera Capital Kills Dividend to Free CAD 45 Million a Year for Debt

By Marcus Bennett

Fiera Capital (TSE:FSZ) is discontinuing its quarterly dividend to unlock more than CAD 45 million a year in additional debt-reduction capacity, after net outflows of CAD 8.3 billion drove assets under management down 7.4% in the third quarter of 2026. The Montreal-based asset manager ended the period with CAD 151.4 billion in AUM, down from the prior quarter.

"Debt reduction is the first priority here," Global CFO Lucas Pontillo said on the earnings call, while noting the firm also wants flexibility to reinvest in growth. The decision reframes the capital allocation question for finance chiefs at similar firms: when outflows compress fee revenue, cutting a dividend buys deleveraging headroom faster than asset sales.

What drove the outflows?

The CAD 8.3 billion in net outflows combined with a CAD 3.5 billion adverse market impact, largely tied to rising rates in fixed income strategies, Global President and CEO Maxime Ménard said. In public markets, the split was CAD 5.2 billion from sub-advised mandates (portfolios Fiera runs inside another manager's fund) and CAD 2.5 billion from directly managed assets, the latter concentrated in Canadian large-cap equities.

The sub-advised outflows break down into two components:

• CAD 3 billion in client rebalancing in the U.S. and Asia;
• CAD 2.2 billion in lost mandates, of which roughly CAD 1.5 billion had been announced previously and transferred directly to PineStone.

Ménard said challenging investment performance had become the principal driver of withdrawals from sub-advised mandates. Quality-oriented equity strategies faced industrywide challenges during the quarter, he added.

How exposed is the sub-advised book now?

Sub-advised assets now represent 16% of total AUM, down from 27% two years earlier. Less than a quarter of the remaining sub-advised assets sit with clients holding mandates above CAD 1 billion, according to Ménard. Pontillo said the smaller size of remaining accounts reduces the impact of any single client departure — a structural point practitioners should weigh when modeling future runoff.

Fiera expects direct transfers to PineStone in 2026 to run below 2025 levels, though Pontillo clarified in the question-and-answer session that this expectation does not apply to all sub-advised outflows.

In private markets, AUM fell approximately CAD 400 million, or 1.8%. New mandates of nearly CAD 200 million were more than offset by returns of capital and the loss of CAD 300 million in undeployed capital after a client took a U.K. real estate mandate in-house.

What did the revenue picture look like?

Third-quarter revenue was CAD 150 million, down 3% sequentially and 10% year over year. Pontillo attributed the annual decline primarily to lower base management fees from sub-advised mandates and weaker private-market performance fees.

Performance fees fell to CAD 600,000, from CAD 2.1 million in the prior quarter and CAD 7 million a year earlier — a drop of roughly 90% against the year-ago figure. Pontillo declined to guide on fourth-quarter performance fees, citing market volatility.

Costs fell faster than revenue. Selling, general and administrative expenses excluding share-based compensation declined 5% from the prior quarter to CAD 107.4 million, including a CAD 2.8 million reversal of previously recognized variable compensation costs.

Where do margins and earnings stand?

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 2.1% from the second quarter to CAD 42.9 million, with the adjusted EBITDA margin improving to 28.5% from 27.1%. Against a year earlier, adjusted EBITDA was down 15%. Pontillo said the current expense run rate is fair to use for the fourth quarter, with expense optimization continuing.

Net earnings attributable to shareholders were CAD 6.7 million, or CAD 0.06 per share, versus CAD 3.5 million, or CAD 0.03 per share, in the preceding quarter. Adjusted net earnings were CAD 23.9 million, flat sequentially.

On the balance sheet, net debt ended the quarter at CAD 689 million, down CAD 34 million as Fiera paid down its credit facility. The net debt ratio held at 3.8 times, while the funded debt ratio fell to 3.1 times from 3.3 times.

What comes next?

Ménard said Fiera is concentrating distribution teams on existing clients, adjusting its presence outside Canada, broadening its investment offering through core and quantitative strategies, and focusing private-market fundraising where demand is strongest.

The firm added three members to its Canadian large-cap equity team, including Charles Nadim as head of Canadian equities. Ménard said Fiera has maintained all but one of its consultant ratings and saw no additional outflow pipeline for those mandates at the time of the call.

He also pointed to preliminary improvement in public equity performance after quarter-end: Canadian Equity Core beat its benchmark by more than 500 basis points (five percentage points) in October. One month does not establish a trend, he cautioned — but if performance stabilizes, the withdrawal pressure that drove the dividend cut could ease with it.