Fiera Capital Q3 2026 Earnings Results & Report

Fiera Capital EPS Results

• Actual EPS: C$0.19
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 4 of last 8 quarters

Fiera Capital Revenue Results

• Actual Revenue: C$150.36 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Fiera Capital (TSE:FSZ) is an employee owned investment manager. The firm primarily provides its services to institutional investors, mutual funds, charitable organizations, and private clients. It manages separate client-focused equity, fixed income, and balanced portfolios. The firm also launches and manages equity, fixed income, and balanced mutual funds and income trusts for its clients. It invests in the public equity and fixed income markets across the globe with a focus on Canada. The firm primarily invests in growth and value stocks of small-cap companies. It also invests in G.A.R.P. and value stocks of large-cap companies. The firm also makes investments in income trusts and preferred shares. It also applies exclusions to be fossil fuel free, integrates environmental, social, and governance considerations, and applies an ethical filter while making its investments. The firm employs fundamental and quantitative analysis along with bottom-up stock picking approach to create its equity portfolios. It employs a top-down macro-economic research to make its fixed income investments. The firm also makes alternative investments, including the use of long/short equity strategy. It benchmarks the performance of its portfolio against the S&P/TSX Index, MSCI ACWI Index, S&P/TSX Composite FFF Index, and S&P 500 indices. The firm conducts in-house research to make its investments. It makes investments in social infrastructure with a focus on affordable housing and community health care facilities and also makes investment in solar and wind power generation, transport, and mid-market assets. It typically invests in Canada. It was formerly known as Fiera Sceptre Inc. Fiera Capital Corporation was founded in 2002 and is based in Montréal, Canada with an additional office in Toronto, Canada, Calgary, Canada, and Vancouver, Canada.

Fiera Capital Q3 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: AUM fell 7.4% sequentially to CAD 151.4 billion, as CAD 8.3 billion in net outflows—mainly from sub-advised mandates and Canadian large-cap equities—and CAD 3.5 billion in adverse market impact weighed on assets.
• Negative Sentiment: Third-quarter revenue declined 10% year over year, while adjusted EBITDA fell 15% to CAD 42.9 million, reflecting lower management and performance fees. Year-to-date performance fees were CAD 2.7 million, versus CAD 9.7 million a year earlier.
• Negative Sentiment: Fiera discontinued its quarterly dividend to prioritize debt reduction and investment in the business. Net debt was CAD 689 million, with a 3.8x net debt ratio at quarter-end.
• Positive Sentiment: Cost reductions helped lift adjusted EBITDA 2.1% sequentially and expand the margin to 28.5%; net debt also declined CAD 34 million from the prior quarter. Management said current expense levels are a fair run rate for Q4, while noting further optimization opportunities.
• Positive Sentiment: Management reported a sharp October rebound in several equity strategies, including Canadian Equity Core, which outperformed its benchmark by more than 500 basis points that month, based on preliminary results. Private-market strategies also delivered positive absolute returns in the quarter, though the company cautioned that one month is not a trend.

Presentation

[Operator]

Good morning, and welcome to the Fiera Capital conference call to discuss financial results for the third 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, SVP and Head of Treasury and Investor Relations at Fiera Capital]

Thank you, and good morning, everyone. Welcome to the Fiera Capital conference call to discuss our financial and operating results for the third quarter. Copies of our press release, MD&A, and earnings presentation are available on fieracapital.com under Investor Relations. This morning, we have with us Maxime Ménard, Global President and Chief Executive Officer, and Lucas Pontillo, Executive Director, Global Chief Financial Officer, and Head of Corporate Strategy, Gabriel Castiglio, Executive Director and Global Chief Operating Officer. Following the opening remarks, we will 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 to Maxime.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Good morning, and thank you for joining us today. Third quarter market dynamics continue to reflect the impact of the challenges in quality-oriented equity strategies across the industry, which also impacted our results and led to significant outflows, driven mostly by redemption from sub-advised strategies. To navigate the near-term headwinds, management and the board are taking decisive measures to address these challenges, while remaining true to the core values that have underpinned our long-lasting track record as one of Canada's leading independent asset managers. Our first priority is to accelerate deleveraging and strengthen our balance sheet. As part of a more disciplined approach to capital allocation, management has recommended, and the board has approved, discontinuation of our quarterly dividend. This will provide us with greater financial flexibility to reduce debt and accelerate investment in the business to diversify our investment platform.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Our investment platform remains a cornerstone of our franchise, supported by quality-oriented strategies that have delivered strong results for our clients over the long term. We are now building on that strength by expanding our capabilities and introducing new investment vehicles, including core and quantitative strategies, to broaden the solutions we can offer to our clients. We are implementing a leaner, more focused distribution strategy that concentrates our resources on the markets and strategies where client demand is strongest, adjusts our presence outside Canada accordingly, and makes existing clients the focus of our distribution teams. Protecting and deepening the relationships we already have is one of the most effective ways to support organic growth. Fiera is in a unique position to become the premier destination for investment talent. We will leverage our stronger balance sheet and our unique platform to attract top talent.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Very few firms with an entrepreneurial culture can offer independence, scale, global reach, and innovative compensation models that align with client success. Before we turn to results, I want to mention that although we are only halfway through the quarter, the turnaround in performance so far in our public equities has been remarkable. For example, our Canadian Equity Fund has added almost 7 percentage points against the index in six weeks, and our Canadian Equity Core is now tracking 6% ahead of the index year to date. Turning now to the results for the third quarter, I'll begin with our assets under management. Total AUM ended the quarter at CAD 151.4 billion, down 7.4% for the end of the prior quarter, reflecting CAD 8.3 billion net outflows, along with CAD 3.5 billion of adverse market impact, mostly from the impact of rising rates in our fixed income strategies.

[Maxime Ménard, Global President and CEO at Fiera Capital]

In public markets, AUM declined 8.4%, reflecting larger-than-expected outflows of CAD 5.2 billion from the sub-advised mandates, along with CAD 2.5 billion from directly managed assets, which was concentrated in Canadian large-cap equity mandates. Our Canadian equity large-cap team is now firmly in place. During the quarter, we were pleased to welcome three new hires who have a combined 68 years of experience, including Charles Nadim, who joined as Head of Canadian Equities. The team has been hard at work engaging with consultants and clients and rebuilding investor confidence through performance and consistent engagement. Meetings with consultants have been constructive, and we have maintained all but one of our consultant ratings. Outflows from these mandates over the past few months have been concentrated in more recent relationships, with approximately half of the attrition coming from clients who had an average tenure of one and a half year of strategy.

[Maxime Ménard, Global President and CEO at Fiera Capital]

In contrast, Canadian large cap retained CAD 15 billion of AUM at the end of the quarter, with more than 85% of assets held by long-tenured clients that have been with Fiera for more than five years. Within sub-advised mandates, net outflows of CAD 5.2 billion included CAD 3 billion of rebalancing from clients in the U.S. and Asia, along with CAD 2.2 billion of lost mandates, of which approximately CAD 1.5 billion was pre-announced and transferred directly to PineStone. We're not aware of any additional client requests for direct transfers of AUM, and we continue to expect direct transfers in 2026 to be lower than in 2025. Slide eight of our earnings presentation provides additional color on sub-advised AUM. While direct transfers have declined, as expected, more challenging investment performance has become the major driver of net outflows from these mandates.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Overall, our exposure to sub-advised AUM has declined to 16% of total AUM from 27% two years ago. The sub-advised AUM that remains less than a quarter is with clients with mandates larger than CAD 1 billion. What remains is a more stable base of small to mid-size clients, reducing the risk of larger outflows. Turning to our private market platform. Private markets AUM ended the quarter down approximately CAD 400 million or 1.8%. We captured close to CAD 200 million of new mandates in the quarter, primarily into real estate strategies. However, this was more than offset by CAD 200 million in return of capital and the loss of CAD 300 million of undeployed capital as a result of the client decisions to insource the management of the U.K. real estate mandate.

[Maxime Ménard, Global President and CEO at Fiera Capital]

During the quarter, we deployed close to CAD 400 million of capital into new projects, bringing total deployed capital to CAD 1.2 billion year to date. Our pipeline of undeployed capital remains strong at CAD 1.6 billion. Our private market business continues to provide clients with a diverse range of investment opportunities. Private credit, in particular, represents an important area of growth and a key focus of our strategic initiatives. in support of these ambitions, we are pleased to announce the following additions to our team. During the quarter, we appointed Amit Gupta as the Global Head of Real Estate Debt, who has an oversight of real estate debt activities across key markets, strengthening leadership of this platform. We also appointed Michael Hayes as the Head of Private Credit, giving greater attention and leadership to one of our strongest strategies. Slide 11 of our earnings presentation highlights our core Canadian business.

[Maxime Ménard, Global President and CEO at Fiera Capital]

New mandates were approximately CAD 200 million in the quarter, but our positive net contribution, which represents demand from our existing clients, totaled CAD 1.9 billion for total gross sales of CAD 2.1 billion in the quarter. This is in line with gross sales for the prior two quarters. While we have seen some near-term pressures on new client sales, our existing clients continue to allocate capital into our strategies. Earlier this quarter, we appointed Emerson Savage as Head of our U.S. Distribution and Co-Head of Distribution Canada, strengthening our leadership, commercial focus, and execution capabilities in one of our most important geographic growth opportunities. Outside Canada, we continue to work to right-size our business to ensure that we are investing the right resources and getting the best returns on our effort.

[Maxime Ménard, Global President and CEO at Fiera Capital]

This includes adjusting our local presence to allocate resources to where we are seeing the greatest demand, as well as focusing our distribution of strategies that work for these local markets. Our distribution teams are also shifting to put greater focus on existing client engagement in order to improve retention. Turning to investment performance. Equity indices ended the quarter higher, but volatility was elevated and gains were generally concentrated in a narrow group of commodity-linked and mega-cap technology names. This drove mixed absolute and relative returns for our equity platform in the quarter. Several strategies delivered strong results in the environment. U.S. large-cap growth and U.S. mid-cap growth outperformed their benchmarks with first or second quartile rankings, and Fiera Atlas Global Companies and frontier markets also added value.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Relative results were more challenging for our Canadian equity strategies, where our underweight exposure to materials was a headwind as gold and silver miners rallied. Since quarter end, we have seen encouraging momentum as the technology sell-off broadened market leadership. Based on preliminary results, most of our flagship equity strategies outperformed their benchmark in October, many by significant margins. Canadian Equity Core outperformed its benchmark by over 500 basis points, recovering almost three quarters of its year-to-date shortfall, while other Canadian, U.S., and international equity strategies outperformed by over 300 basis points. Turning to fixed income. It was a more challenging quarter, impacted by rising rates and uncertainty around central bank policy. Nevertheless, our Canadian fixed income strategies finished close to their benchmarks, and all of them remain ahead year to date and longer term, with 78% of fixed income AUM outperforming over the one-year period and 94% over three years.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Looking beyond the quarter, most of our public market strategies remain ahead of their benchmark since inception. While one month is not a trend, October has shown how our quality-focused portfolio can perform when market leadership broadens. We remain focused on delivering consistent long-term results for our clients. Our private market strategies continue to perform well in the third quarter and over the long term. Within real estate, our core and small-cap industrial strategies produced positive absolute returns for the quarter and annualized returns of 8% and 13% respectively since inception. Within private markets, all strategies produced positive absolute returns in the quarter, with our direct lending opportunities fund generating an internal rate of return of 2.4% for the quarter and 12% since inception. A renewed focus on our investment performance remains a key pillar of our strategic plan.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Against a challenging industry backdrop across both public and private markets, we believe the strength of our investment talent combined with the breadth of our investment strategies positions us well to deliver compelling portfolio solutions for our clients. With that, I'll turn the call over to Lucas to walk you through the financials in more detail.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Thank you, Maxime. Good morning, everyone. As Maxime acknowledged, the challenging backdrop for quality-oriented and equity strategies impacted our third quarter results, including significant outflows. In response, we continue to take decisive steps to optimize our operations and align our cost base with the current revenue environment. Turning first to revenues and key drivers by segment. Total revenues were CAD 150 million in the third quarter, down 3% from the prior quarter, primarily reflecting lower base management fees from sub-advised mandates, along with lower performance fees. This was partly offset by higher share of earnings from joint ventures and associates. Compared with the same quarter last year, total revenues declined 10%, primarily due to lower base management fees from sub-advised mandates and lower performance fees in private markets. On a year-to-date basis, total revenues were down 7% from the prior year period.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

The decrease mainly reflected lower base management fees in public markets from sub-advised mandates, lower performance fees, and a lower share of earnings from joint ventures and associates. Performance fees were CAD 600,000 in the quarter, compared with CAD 2.1 million in the prior quarter and CAD 7 million in the same quarter last year. As I mentioned earlier, the decrease was primarily driven by lower performance fees in private markets. Year-to-date, performance fees of CAD 2.7 million compared with CAD 9.7 million in the same period last year, mostly related to our Global Agriculture Fund. Commitment and transaction fees were CAD 3.1 million compared with CAD 3.7 million in the prior quarter and CAD 2 million the same quarter last year. The year-over-year increase primarily reflects higher transaction fees from real estate strategies in Canada. Year-to-date, commitment and transaction fees of CAD 8.1 million compared with CAD 9.7 million in the prior year period.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Share of earnings from joint ventures and associates was CAD 2.6 million, up CAD 200,000 in the prior quarter and CAD 1.4 million in the same quarter last year. As we have noted previously, this item can vary significantly from quarter to quarter given the long-term nature of the underlying projects within Fiera Real Estate UK. Year-to-date, share of earnings from joint ventures and associates were CAD 3.7 million compared with CAD 6 million from the same period last year. Other revenues was CAD 3.9 million, broadly stable both sequentially and year-over-year. Year-to-date, other revenues of CAD 11.8 million were largely in line with prior year. Looking more closely at base management fees. In private markets, base management fees were CAD 49 million, approximately flat from the prior quarter. On a year-over-year basis, base management fees were down 2% for the quarter and 1% year-to-date, reflecting lower fee rate, partly offset by higher average deployed AUM.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

In public markets, base management fees of CAD 91 million were down 5% from the prior quarter, reflecting lower average AUM, largely due to the outflows from sub-advised strategies. Base management fees for our directly managed mandates remained largely in line with the previous quarter. Year-over-year, public markets base management fees declined 11%, reflecting a 6% decline in average AUM, mostly related to sub-advised strategies, along with a lower base management fee rate reflecting a shift in our AUM mix. The base management fees for our directly managed mandates remained flat. Year-to-date, public markets base management fees of CAD 285 million were down 7% from the prior year period, reflecting a lower fee rate and a 2% decline in our average AUM. As a reminder, part of the impact from lower base management fee revenue is also offset by decline in sub-advisory expenses.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Public market base management fees for directly managed strategies remained flat year-over-year. Now turning to expenses and profitability. SG&A and expenses, excluding share-based compensation, were CAD 107.4 million in the quarter, down CAD 5.7 million or 5% from the prior quarter. The decrease primarily reflects lower compensation costs driven by cost optimization efforts, along with lower travel and marketing expenses and lower sub-advisory fees. CAD 2.8 million of the lower compensation costs were previously recognized variable compensation costs that were reversed in the current quarter. Compared with the same quarter last year, SG&A expenses, excluding share-based compensation, declined CAD 9.4 million or 8%, reflecting lower employee compensation costs and lower sub-advisory fees. Excluding the reverse variable compensation costs in the current quarter end, SG&A, excluding share-based compensation, was still down approximately 6% year-over-year. On a year-to-date basis, SG&A expenses, excluding share-based compensation, declined CAD 22.4 million, or 6%.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Approximately 70% of our decrease is related to lower compensation costs associated with our continued cost optimization initiatives, with the remainder due to lower sub-advisory fees. Lower expenses more than offset the sequential decline in revenues, resulting in a higher adjusted EBITDA of CAD 42.9 million, up CAD 900,000, or 2.1% from the prior quarter. Adjusted EBITDA margin of 28.5% in the current quarter increased 140 basis points from 27.1% in the prior quarter. Compared with the same quarter last year, adjusted EBITDA decreased CAD 7.4 million, or 15%, as lower revenues were partly offset by lower expenses. Notably, our cost optimization initiatives have fully offset the pressure from lower sub-advised revenue, and the decline in adjusted EBITDA is mainly due to lower performance fees in our private market strategies.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Year-to-date, adjusted EBITDA was CAD 127.7 million, compared with CAD 139.4 million in the prior year period, reflecting an 8.4% reduction, of which approximately 5% of that was driven by lower performance fees. Turning to net earnings. Net earnings attributable to shareholders were CAD 6.7 million, or CAD 0.06 per share, on both a basic and diluted basis. This compares with CAD 3.5 million, or CAD 0.03 per share, in the prior quarter. Adjusted net earnings of CAD 23.9 million were flat from the prior quarter and were down CAD 1.1 million for the same quarter last year, primarily reflecting lower revenues, partly offset by lower SG&A expenses and lower interest on long-term debt. On a basic per-share basis, adjusted net earnings were CAD 0.23, flat compared to the prior quarter and same quarter last year, as share repurchases throughout the year offset modest decline in adjusted earnings.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

On a fully diluted basis, adjusted net earnings were CAD 0.19 per share, compared with CAD 0.21 in the prior quarter and CAD 0.23 in the same quarter last year. The year-over-year decline reflects in part the dilutive impact of the 7.4% hybrid debentures issued in May 2026. Looking at cash flow. Last 12 months, free cash flow was CAD 90 million, down only CAD 3 million from the prior quarter due to the timing of interest paid on long-term debt and higher dividends paid to non-controlling interests. This was partly offset by higher distributions received from joint ventures and associates. Compared to the same period last year, the last 12 months free cash flow increased by CAD 3 million, reflecting lower lease payments combined with lower interest paid on long-term debt. It was partly offset by higher dividends paid to non-controlling interest. Now turning to the balance sheet.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Net debt ended the quarter at CAD 689 million. This was down CAD 34 million from the prior quarter, as we used a portion of our higher free cash flow to pay down our credit facility. Our net debt ratio was 3.8x, flat compared with the prior quarter, as lower net debt was moderated by lower last 12 months adjusted EBITDA. The net debt ratio increased by 0.3x compared to the third quarter of last year. Our funded debt ratio, as defined by our credit facility, was 3.1x for the quarter, down from 3.3x in the prior quarter, reflecting the lower balance on the facility.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Funded debt ratio increased from 2.9x in the same quarter last year, where the increase reflects a lower funded debt ratio in the prior year due to the timing of the debenture issuance and the debenture redemption in the second and fourth quarters respectively of last year. As a reminder, we issued a 7.75% hybrid debenture in the second quarter of 2025 and only redeemed the 8.25% hybrid debenture in the fourth quarter of 2025. In the interim, proceeds were used to reduce the balance on our credit facility, which temporarily lowered our funded debt. Finally, our capital allocation priorities are firmly focused on accelerating debt reduction and increasing balance sheet flexibility.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

This quarter, management has recommended and the board has approved the discontinuation of the quarterly dividend, which will allow us to retain additional capital, reduce leverage, and more quickly and provide greater flexibility to support the long-term needs of the business. With that, I'll turn it back to Maxime.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Thank you, Lucas. We remain focused on executing against our strategic priorities. We are strengthening the balance sheet through prudent capital allocation, continued expense management, and redirect capital to strategies with the strongest economics. We continue to refocus distribution efforts on client retention and right-size our global distribution capabilities. With respect to investment performance, we are working to broaden our range of investment strategies, including development of core and quantitative strategies, while at the same time preserving the high conviction approach that has historically generated exceptional returns for our clients. We continue to optimize our operation, replacing legacy platforms and advancing AI initiatives that create efficiencies and improve productivity. Lastly, we drive growth in private markets. We are focusing on fundraising on strategies with the greatest demand and strengthening leadership to give our strongest strategies the right dedication to drive growth.

[Maxime Ménard, Global President and CEO at Fiera Capital]

I will now turn the call over to the operator for questions.

[Operator]

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. If you'd like to ask a question, please press star followed by number one on your telephone keypad. We ask analysts to limit themselves to two questions. If your question has been answered and you'd like to withdraw from the queue, please press star followed by number two. If you're using a speakerphone, please put your handset and press any keys. One moment, please, while we compile the roster. Your first question comes from Gary Ho with Desjardins. Please go ahead.

[Gary Ho, Analyst at Desjardins]

Thanks. Good morning. Just wanted to touch on the dividend and capital allocation here. Just walk us through maybe the decision to discontinue the dividend. Sounds like you will be using that for deleveraging mostly, but given where the shares are also trading, how would you rank your capital allocation priorities, including buybacks, deleveraging, and obviously, kind of reinvestment in the business for growth?

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Yeah. Thanks for that, Gary, and I think you have answered your own question really in terms of the priorities there and in terms of exactly how you have outlined them. Absolutely, debt reduction is the first priority here. We have made good progress on that just over the last quarter alone in terms of the plus CAD 30 million that we were able to reduce on the facility, and we want to keep moving forward with that trend.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

From our perspective, that ability to put CAD 45 million plus a year of additional debt reduction capacity to work by reducing the dividend, while it was not an easy decision for us to make, I think it is one that is important, firstly for our clients, so to make sure that we can keep demonstrating the financial stability that we have to date, and secondly, to be able to reinvest in the business going forward, making sure we are looking at the right growth opportunities.

[Gary Ho, Analyst at Desjardins]

Okay, great. Just second question, in terms of Q4 performance fees, typically the largest performance fees of any quarter. When I look at last year, it was around 13.5 million. With 1.5 Months to go, can you maybe help us in kind of thinking through performance fees expectations? I know the public market side, we can loosely triangulate given some of the funds that we have been tracking, but tougher on the private market side. Any help would be appreciated.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

I'm sure it would, and I'll say what I say every year is that going into the fourth quarter, we don't provide guidance on performance fees. I think we've given a good look back in terms of sort of how we've trended year to date. But as always, and particular in these volatile markets that we're in, I mean, just look at the vol that we've gone through in the last 60 days alone. Again, we're not going to give any guidance on performance fees at this point.

[Gary Ho, Analyst at Desjardins]

Okay. Those are my two. Thank you.

[Operator]

Thank you, Gary. Your next question comes from Scott Fletcher with CIBC. Please go ahead.

[Scott Fletcher, Analyst at CIBC]

Hi. Good morning. I wanted to ask just on the SG&A expenses, and you sort of walked us through the impact of the reversal. If we think about that sort of steady state decline in expenses, should we think about the current quarter as a run rate? Should we think about the decline year-on-year as something we should project forward? Just anything you can help us with on the expenses going forward.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Yeah, absolutely. I think hopefully what you are also seeing is that there is a quarter-over-quarter progression in terms of how we are dealing with that. What I would say is while the run rate is good going into Q4, expense optimization is an ongoing effort here, and there are things that we are looking to doing consistently. One of our pillars of our strategy going forward, of the five pillars, is effectively to continue to optimize our operating model and our operating structure. To Max's point, I think while we focused the last two quarters really on distribution and sort of right-sizing our distribution model internationally, there are still opportunities for us to focus on our operational structure and making sure that we are getting the full benefit of scale of our model.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

As I said, I think we are going to keep working on those going forward, but your current run rate is a fair run rate to use for the fourth quarter.

[Scott Fletcher, Analyst at CIBC]

Okay, thanks. If I just flip back to deleveraging, I think that clearly the dividend discontinuation will do some work here. I am wondering if there is anything else in the business that you can sort of look at, potential monetization opportunities if you are thinking about accelerating the deleveraging in an effort to reduce that funded debt ratio.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Sure. I mean, I come back to, I think we are working with the things that are easiest in our control right now. The expense management was a key one that we have started now for the last little while. As I say, the dividend will go a long way, particularly by the time that we get to this time next year, in terms of taking easily another CAD 45 million bite out of our current leverage position. In terms of the other options that you spoke about, certainly there are always discussions about things, but that is not what we are dealing with in front of us right now. The dividend was the biggest decision that we made and the biggest contribution that we can make in the short term to deleveraging the balance sheet.

[Scott Fletcher, Analyst at CIBC]

Okay. Thank you.

[Operator]

Thank you, Scott. Your next question comes from Graham Ryding with TD Securities. Please go ahead.

[Graham Ryding, Analyst at TD Securities]

Hi. Good morning. Just sort of flag that. Or I guess the last couple quarters for the sub-advised AUM, there has been some outflows that have been fairly material, but I think you flagged that those are primarily coming from clients that are larger in size, greater than CAD 1 billion, within those sub-advised strategies. How about this quarter? Was it a similar dynamic? Were those outflows from larger clients, or were they more broad-based across client size?

[Maxime Ménard, Global President and CEO at Fiera Capital]

Yeah. So, again, over the quarter, we had one leakage of one large client, about CAD 1 billion, and the rest that were related to performance were, I would say, mid-size to large-size client base, yes. As I mentioned, we are now left with a remaining book of business in that sub-advised category with smaller to mid-size accounts that are, in good majority, multi-strategies clients of ours, to limit the risk of additional departures, or even from a performance standpoint, have other optionality within our complex.

[Graham Ryding, Analyst at TD Securities]

Okay. So you feel like there's less of a pipeline of outflows from those sub-advised strategies. Is that fair?

[Maxime Ménard, Global President and CEO at Fiera Capital]

Yeah.

[Graham Ryding, Analyst at TD Securities]

I think you made a comment that you expect outflows in 2026 from those sub-advised to be less than 2025, as my rough math suggests that there's no outflows expected in Q4 2026.

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Yeah. To clarify, that's leakage. So, we don't expect the same level of leakage, the sort of the transfers directly to PineStone, but not with the outflows.

[Graham Ryding, Analyst at TD Securities]

Got it. Okay. Understood. How about the just with the turnover that you've had with the Canadian equities team, sounds like you're starting to see some better performance already. But anything in terms of the pipeline there, any outflows that have been sort of a result of that turnover that you would call out?

[Maxime Ménard, Global President and CEO at Fiera Capital]

Yeah. We are extremely happy with how things turned out. We were able to onboard the new members of the team to join our existing team here fairly rapidly. Again, because of the similarities in styles and also investment process, things are going really well. We have been able to get in front of most consultants, if not all. We have been in front of most of our clients. I feel pretty confident about where we stand right now. In terms of any indications of any other outflows, it is very mitigated. I do not really have visibility on anything else. I think the immediate change around that was sudden, and as I mentioned, it was mostly short-term or less than a year and a half clients that made quick decisions. Performance has turned in our favor over the last six weeks in the two mandates we run, the core and the flagship.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Yes, it is trending positively. But for now, we do not see any other additional outflow pipelines.

[Graham Ryding, Analyst at TD Securities]

Okay. Good to hear. Okay. That is it for me. Thank you.

[Operator]

Thank you, Graham. Your next question comes from Katy Chen with BMO Capital Markets. Please go ahead.

[Katy Chen, Analyst at BMO Capital Markets]

Thanks for taking my question. I will ask on behalf of my analyst Étienne. Just want to come back on the redemption at PineStone. Why have you seen higher redemptions from clients with more than 1 billion in allocations? Looking forward, why should the capital from clients with less than 1 billion in AUM remain stable?

[Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy at Fiera Capital]

Yeah. Thank you for that. If I understood, I mean, it's a two-part question, but it's one and the same. Really, the point that was being made is that when you had departures of the larger AUM clients, obviously it had an order of magnitude impact. Now, with the fact that the client base has gone to a point where the actual account sizes are much smaller in quantum, the point is, as clients would leave or transfer at that point, the impact would be much less. So, that's the distinction that we're trying to make between the larger AUM clients that were historically part of the book versus the size of the clients that remain.

[Katy Chen, Analyst at BMO Capital Markets]

Thanks. Thanks. That's definitely helpful.

[Operator]

Thank you, Katy. There are no further questions at this time. I will turn it back to management for some closing remarks.

[Maxime Ménard, Global President and CEO at Fiera Capital]

Thanks for joining us today. If you have any further questions, contact information for investor relations as well as media is in our press release, and we would be more than happy to get back to you. Your valuable time is finite, and we thank you for spending it with us this morning. Until next time, goodbye.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.

Participants

Executives

• Amin Mousavian, SVP and Head of Treasury and Investor Relations
• Maxime Ménard, Global President and CEO
• Lucas Pontillo, Executive Director, Global CFO, and Head of Corporate Strategy

Analysts

• Gary Ho, Analyst at Desjardins
• Scott Fletcher, Analyst at CIBC
• Graham Ryding, Analyst at TD Securities
• Katy Chen, Analyst at BMO Capital Markets