Fiera Capital Q2 2026 Earnings Report

Fiera Capital EPS Results

• Actual EPS: C$0.03
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Fiera Capital Revenue Results

• Actual Revenue: $155.14 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Fiera Capital Announcement Details

• Quarter: Q2 2026
• Date: 8/7/2026
• Time: Before Market Opens
• Conference Call Date: Friday, August 7, 2026
• Conference Call Time: 10:00AM ET

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 Q2 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Flows were challenging: quarterly public-market net outflows excluding sub-advised mandates were CAD 2.2 billion, while sub-advised outflows reached CAD 5.3 billion. Management also expects an additional CAD 1.5 billion transfer to PineStone and a roughly CAD 500 million equity-mandate redemption in the third quarter.
• Neutral Sentiment: Total AUM rose 2.1% sequentially to CAD 163.5 billion as market appreciation more than offset net outflows, but lower average public-market AUM and an unfavorable asset mix reduced base management fees.
• Positive Sentiment: Private Markets continued to build momentum, with approximately CAD 100 million in new mandates, more than CAD 115 million in net inflows, CAD 500 million deployed during the quarter, and a CAD 1.9 billion pipeline of undeployed capital. Demand was strongest in real estate and private credit, including a new note feeder for life insurers.
• Neutral Sentiment: Investment performance improved across several flagship strategies, including large-cap and emerging-market equities, while 91% of fixed-income AUM outperformed its benchmark over the past year. Fiera also appointed Nicholas Smart to lead Canadian Large Cap Equities following actions related to professional-conduct standards.
• Positive Sentiment: Management emphasized cost discipline, with year-to-date SG&A down 5.5% and the adjusted EBITDA margin stable at 27%, despite lower revenue. The company renewed its normal-course issuer bid for up to CAD 4 million of share repurchases, maintained a dividend payout ratio below 50% of free cash flow, and expects leverage to decline in the second half.

Presentation

[Operator]

Good morning, welcome to the Fiera Capital 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 at Fiera Capital]

Thank you, good morning, everyone. Welcome to the Fiera Capital conference call to discuss our financial and operating results for the second 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, 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'll have a question and answer session.

[Amin Mousavian, Senior Vice President, Head of Treasury and Investor Relations at Fiera Capital]

Comments made on today's call, including replies to certain questions, may deal with forward-looking statements, which are subject to risk 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.

[Amin Mousavian, Senior Vice President, Head of Treasury and Investor Relations at Fiera Capital]

I will now turn the call over to Max.

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

Good morning, 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. Total assets under management ended the quarter at CAD 163.5 billion, up approximately 2.1% from the end of the prior quarter. A strong markets appreciation more than offset net outflows. Public Markets AUM of CAD 141.2 billion increased 2.4% from the prior quarter as strong market growth was partly offset by net outflows.

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

Excluding sub-advised mandates, Public Markets net outflows totaled CAD 2.2 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's institutional investment platform, and the governance of our Global Investment Office, which oversees performance, investment risk, and resourcing.

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

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 Capital, regardless of seniority or commercial importance. Now, looking at the sub-advisory AUM, outflows were CAD 5.3 billion in the quarter, reflecting a single U.S. client that transferred assets directly to PineStone, which we pre-announced in the previous quarter, along with rebalancing from clients in the U.S., EMEA, and Asia. As previously announced, we are aware of one remaining client request to transfer approximately CAD 1.5 billion of AUM directly to PineStone in the second half of the year. We continue to expect direct transfer in 2026 to be lower than prior year.

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

Turning to our Private Markets platform. Private Markets AUM increased 0.5% during the quarter and 1.4% year to date, reflecting net inflows and market appreciation. We raised close to CAD 100 million in new mandates during the quarter, primarily into our real estate and private credit strategies. Net inflows totaled more than CAD 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.

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

During the quarter, more than CAD 500 million of capital was deployed into new projects, bringing total deployed capital to CAD 800 million year to date. Our pipeline and undeployed capital remains strong at CAD 1.9 billion. We also began deploying capital into our Canadian Built-in 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.

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

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's scale and capture multi-asset opportunities across all platforms. Now taking a look at our Canadian franchise. We are continuing to allocate resources towards growth within the Canadian retail channel through relationships with financial intermediaries. We were recently granted four SMA platform approval with our well-known Canadian advisor, which follows last year's SMA platform addition with a prominent Canadian wealth manager.

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

One of our flagship equity strategies was also added to our large Canadian Life Co investment platform during the quarter. Within our Canadian business, outside of a 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 CAD 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 long term.

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

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.

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

Looking at Private Markets, our real estate core and small cap industrial funds continued 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.

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

With that, I'll turn the call over to Lucas to walk us through the financials in more detail.

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

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. Resulted in a stable adjusted EBITDA margin. Turning first to the revenues and key drivers by segment. Total revenues of CAD 155.1 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.

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

Year-to-date basis, total revenues were down 5%, mostly due to lower base management fees in Public Markets. During the quarter, performance fees were CAD 2.1 million, primarily from our private credit and infrastructure strategies, showing strong signs of recovery from the prior quarter and down slightly by CAD 400,000 compared to the second quarter of last year. Year-to-date, performance fees of CAD 2.1 million compared with CAD 2.7 million in the same period last year. Commitment and transaction fees were CAD 3.7 million, up CAD 2.4 million compared to the prior quarter, reflecting higher fees earned from our real estate and private credit strategies, and declined CAD 1.5 million compared to the prior year quarter due to lower fees earned from real estate strategies from clients in EMEA.

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

Year-to-date, commitment and transaction fees of CAD 5 million compared with CAD 7.7 million in the prior year period. Share of earnings from joint ventures and associates was approximately CAD 200,000 in the quarter, compared to close to CAD 1 million in the prior quarter and CAD 2 million in the same quarter last year. Share of earnings and 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. Year-to-date, share of earnings from joint ventures and associates of CAD 1.1 million decreased compared with CAD 4.6 million for the same period last year. Other revenues were CAD 4 million for the quarter, flat from the prior quarter and down CAD 5.3 million in the same quarter last year.

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

Year-to-date, other revenue of CAD 7.9 million were largely in line with the CAD 8.4 million in the same period last year. Looking more closely at base management fees. In Private Markets, base management fees were CAD 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 CAD 98 million declined slightly from the prior year period, reflecting lower fee rate, partly offset by higher deployed AUM. In Public Markets, base management fees of CAD 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.

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

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. This was partly offset by an increase in our average total AUM. Year-to-date, Public Markets base management fees of CAD 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. Now turning to expenses. SG&A expense, excluding share-based compensation, were down 3.6% year-over-year, and on a year-to-date basis, expenses were down CAD 13 million, or 5.5%. The decline in expense reflects cost savings from continued optimization effort, along with lower sub-advisory fees paid.

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

SG&A expenses, excluding share-based compensation, were CAD 113.1 million in the quarter, up 2.3% from the prior quarter, primarily due to the timing of variable compensation costs, partly offset by lower sub-advisory fees and professional fees. Adjusted EBITDA was CAD 42 million for the quarter, down 2% from CAD 42.7 million in the prior quarter. Adjusted EBITDA margin was 27.1% in the quarter, down from 27.9% in the prior quarter. The decline reflects the timing of variable compensation, which I previously mentioned, partly offset by higher revenue. Year-over-year, adjusted EBITDA declined CAD 3.7 million, reflecting lower revenues, partly offset by lower SG&A expenses. On a year-to-date basis, adjusted EBITDA of CAD 84.7 million declined CAD 4.4 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.

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

Turning now to net earnings. On an adjusted basis, net earnings of CAD 23.9 million were approximately flat from the prior quarter and were down CAD 3.3 million from the same quarter last year, reflecting lower revenues, partly offset by lower SG&A expense and lower interest on long-term debt. Year-to-date, adjusted net earnings of CAD 47.4 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. On a diluted per share basis, adjusted net earnings were CAD 0.21 for the quarter, flat from the prior quarter and down CAD 0.03 from the same quarter last year. Looking at cash flow and capital allocation.

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

We generated last 12 months free cash flow of CAD 93 million, down CAD 3 million from the prior quarter, primarily due to lower distributions received from joint ventures and higher dividends paid to non-controlling interests. 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 CAD 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.

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

During the quarter, 134,000 shares were repurchased for approximately CAD 700,000. On a year-to-date basis, we have repurchased close to 700,000 shares for CAD 3.9 million. Subsequent to quarter end, we renewed our NCIB to purchase up to CAD 4 million shares over the next 12 months. We continue to believe the shares are significantly undervalued at the current levels. Our dividend payout ratio relative to our 12 months free cash flow remained steady from the prior quarter at just under 50%.

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

Turning to the balance sheet. Net debt ended the quarter at CAD 723 million, up CAD 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 during the quarter. Our net debt ratio was 3.8x, compared with 3.6x in the prior quarter and 3.7x 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.

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

Finally, the board approved a quarterly dividend of CAD 0.108 per share, payable on September 17th, 2026, to shareholders of record as of August 20th.

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

With that, I'll turn the call back to Maxime.

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

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 intermediaries partners. Improvements in the investment performance, particularly within our flagship strategies, demonstrate the value of our investment team's discipline and differentiating investment process. We remain focused on delivering consistent long-term outcomes for clients, which we believe is the most important driver of our organic growth over time.

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

Lastly, we have confidence in Nick and the team, and we are fully committed to supporting them through this transition. We will continue to invest in the people, resources, and capabilities necessary to ensure the Canadian equity team remains well-positioned to build on its track record and continue to deliver value for clients.

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

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

[Operator]

Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, press star two. One moment, please, for your first question. Your first question comes from Etienne Ricard from BMO Capital Markets. Please go ahead.

[Etienne Ricard, Equity Research Analyst at BMO Capital Markets]

Thank you, and good morning, team. Maxime, you've listed your top two priorities as distribution and performance. What would you say has been the biggest change in the way Fiera assesses performance and expense distribution since you took on the CEO role?

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

Yeah. That's a really good question. Let me start first with distribution. I think you go back a few years back when we regionalized the distribution, and the model that was assessing the different opportunities in the different markets and trying to be more prescribed or at least customize the distribution offering in the different markets for a different number of reasons. First, the level of competitiveness in the different markets is different. Our ability to gain market share is different. Our brand recognition is different, and the investment platform or the offering comes at a different level of sophistication or evolution, depending on where we're at. What I mean by that is, in Canada, we are clearly a high standard of brand recognition. We have a multi-asset platform. We already have a significant market share, and we have a fully developed distribution model.

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

When you think about all of the pillars to make this a success, I would say Canada is at full throttle in terms of our ability to execute, and we've seen significant results from a growth perspective over the last few years. We've also seen an evolution. Again, not all of this is calculated by a net organic growth or gross organic. It's also by how we see the evolution within our ratings from the consultant perspective, the knowledge in our solution-based platform, and also the introduction of new channels, including the intermediaries, where you've seen some significant market share over the last few years. When we go in markets like the U.S., the EMEA, or the Asian market, you enter a whole different space of competitiveness, of which we have to adapt and adjust depending on our offering.

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

Based on these different offerings, we have seen some significant improvement in our consultant rating in EMEA particularly. Where our team has done great work there in introducing the Fiera name, introducing the specific solutions where we think we could have success, and driving sales through new channels. Namely the insurance, where we've had some success in the fixed income and others. The same goes for the U.S. Largest market from an AUM perspective. Fast-moving product development evolution in a very difficult market to gain market share. We've had success. It's limited to a number of very specific solutions, so we have to adapt our distribution to be more nimble, to be focused, and execute extremely well.

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

We've seen, again, an evolution of our rating within the consultant. We've seen evolutions in a number of meetings, and we're tracking well in terms of the pipeline in these different markets.

[Etienne Ricard, Equity Research Analyst at BMO Capital Markets]

Specific to Canada, for what strategies have you seen the best interest, and conversely, for what strategies has it been more challenging?

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

Canada, again, the multi-assets is really our key differentiator when it comes to our ability to compete. Very few other firms have a full spectrum of investment platforms the way we do and have it fully integrated. Additionally, that we have now brought Private Markets within our platform from an operating standpoint. We see a large demand within multi-assets. That's also a function of the market. We have to go by sort of the demand from a consulting standpoint, from the institutional standpoint. What we've also seen is core Canadian real estate is a very demanding asset class from a performance standpoint. Up to now, obviously, a Canadian Large Cap is a very performing asset class. We were seeing a lot of flows.

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

Right now because of a style-driven situation, the performance is a little bit out of favor. We're still seeing a lot of appetite for that kind of strategy. In Canada, I would sum it up into a multi-asset platform, and core strategies where we see our performance and really good performance.

[Etienne Ricard, Equity Research Analyst at BMO Capital Markets]

In Private Markets, what trends are you seeing in terms of redemption activity, and the willingness to invest more capital in the space?

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

Institutional, we've seen. There hasn't been a huge movement away from Private Markets. Quite the opposite. When you look at on the forward basis, I think the next three to five years will have significant appetite within what we call the real assets, which would include infrastructure and real estate. There's also a big demand within the private credit space. The institutional demand within particularly the pension side, there's still lots of appetite for these different asset class. I would say less so within the private equity space. Again, private credit and the infrastructure real estate, real assets, there's good demand, accelerated demand over the last five years.

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

Again, I think overall the Private Markets will continue to have an increasingly important part of the asset allocation for the pension owners and the pension level market and the mid-market. When it comes to the retail, there's been a lot of noise around the retail. Here in Canada, the U.S., generally, I think there's been a lot of appetite over the last few years for the retail or individual investors to access Private Markets, and it has created lots of flows. I think right now there's a bit of a pullback in the retail market for the appetite for Private Markets.

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

We see it in asset allocation and also some of the other funds, not only us, but some of our peers as well, seeing a slowdown in flows within the private wealth or retail market to the private market solution.

[Etienne Ricard, Equity Research Analyst at BMO Capital Markets]

Thank you very much.

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

Thank you.

[Operator]

Your next question comes from Bart Dziarski from RBC Capital Markets. Please go ahead.

[Bart Dziarski, Diversified Financials Analyst at RBC Capital Markets]

Great. Thanks. Good morning, everyone. I wanted to stick with the Private Markets theme. Max, you called it the growth engine, when I look at new mandates and net organic growth year-to-date, it's sort of flat. Just want to see what's driving that. In terms of the outlook, we've seen really strong fundraising from the public peers, including in Private Equity. Can you square up your more benign comments around Private Equity for what we're seeing in the broader market? Thanks.

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

Private Market in general for us is a growth area. Not only as a single strategies, but through our multi-assets. You got to remember that when we do tactical asset allocation or even multi-assets balance mandates where we have a good majority of the business coming through, there's a significant allocation to the Private Markets. Some of the growth we've seen lately have been through customized solution. As you remember, the mandates that we went through, one of the union in Canada, what we call the Canadian Opportunities Fund has been an extremely well-structured solutions for the market. As part of that original group of unions, there's been additional members joining. As a result, we forecast and foresee within our pipeline additional assets coming in through this piece of the business.

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

In terms of my comment to the Private Equity, these are just industry standards statistics that I've been looking at in terms of forward-looking. Private Equity came as the one that was showing the less growth relative to credit in terms of the opportunities for the Private Market business. There's always obviously the element of performance. We look at Private Markets in many of the instances, particularly for multi-assets and private wealth as an alternative to fixed income. They're higher yield opportunities with a premium on liquidity. That has been a high differentiating factor for us within the private wealth business. When you get into the multi-asset mid-market institutional, that's also something that we find extremely appealing in terms of total returns.

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

Private Markets has played that role very well over the last few years and continues to be a part of the asset allocation that is preferred over a fixed income solution or a fixed income allocation, and that gives a higher yield. With all these components, we continue to think that this is a part of our franchise that will continue to take an important part of our revenue on a go-forward basis and also additionally bring additional AUM. It is a long cycle from a sales perspective. I've assigned individuals. As I talked in the past, we have dedicated individuals that now sales Private Markets. The emphasis is to make sure that we have the high caliber individual, the high caliber and the high quality conversation with pension owners, pension clients to penetrate that market.

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

With all that said, we're not the only one to see this opportunity. There's a fast market evolution, fast product evolution within the Private Markets. We have to keep on innovating and making sure we bring forward the right solution. Again, the Fiera note that we talked about for the insurers is an example of this. Within the global investment office, we spend a lot of time thinking about what's next, what's coming, what's the right product, and then we look for those different opportunities.

[Bart Dziarski, Diversified Financials Analyst at RBC Capital Markets]

Got it. That's very helpful. Just on performance, we get gross IRR disclosure on slide 12. Could you give us a sense of roughly what the net IRRs look like. You talked about differentiated performance. How is the performance in Private Markets and your strategies differentiated versus peers? Thanks.

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

Just maybe on the first part of your question, what I'd say, Bart, is we can provide you with that offline just because it does vary by strategy. Coming back to on a net basis, it's not going to be consistent strategy by strategy, and it really does depend. It also does depend on the structure for which the products are being offered, whether it's through private wealth or whether through feeders or whether through separate accounts. Let us get you that information. We can easily provide that.

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

Sorry, we didn't catch the second part of the question.

[Bart Dziarski, Diversified Financials Analyst at RBC Capital Markets]

Yes, Max talked about performance being differentiated. Just wanted to understand better how it's differentiated in the market.

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

When I talk about differentiated performance, the way we use Private Markets as an alternative to fixed income within our private wealth solution has been a high differentiating factor for private wealth solutions, multi-assets as well. If you look historically, the success of the flows within the open-ended solutions and evergreen open funds within Private Markets has been a high differentiator in the market. Not a lot, but some competitors have come to the party and introduced open-ended solutions as well to alternatives to lower yield fixed income. I think we certainly have a leg up on this and more historical performance than most of our competitors in offering open-ended solutions as part of our multi-asset strategies.

[Bart Dziarski, Diversified Financials Analyst at RBC Capital Markets]

Got it. Very helpful. Thanks, guys.

[Operator]

Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Your next question comes from Michael Makhoul from TD Securities. Please go ahead.

[Analyst at TD Securities]

Hi. Good morning. Thanks for taking the question. Just wanted to start with if you could possibly remind us of some of your covenant thresholds. Debt to EBITDA sort of ticked up again in the quarter, and understand that there's a timing aspect of that in the first and second half of the year. If you could just remind us of maybe those covenant thresholds and sort of an outlook for leverage and if you're comfortable with the tools you have to manage.

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

Yeah. Thank you. Welcome to our call. I think it's the first time we speak. I would say, the easy number to remember is 3.5x, it's 3.5x as a floor for the interest coverage ratio and 3.5x as a ceiling for the funded debt ratio. You can see where our ratios stand in the quarter, well above 4x for interest coverage, and that's a ratio that's been steadily improving over time. There's a few things that we've done over the year in terms of changing the capital structure. Everything from some of the debt that we issued last year. You'll recall we had a period of time where we were actually carrying two hybrid instruments at once and effectively doubling down on higher interest last year.

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

If you look at our interest expense run rate, one of the things that's giving us comfort in 2026 is that effectively our quarterly run rate is going down from CAD 12 million a quarter closer to 10. We're picking up almost CAD 4 million a year of interest savings there. That's certainly helping the interest coverage ratio. The other piece is when you look at the funded debt, as I mentioned in my comments, first half of the year is usually heavier from a cash deployment cycle. Second half of the year is usually when we come into more of a cash collection cycle. As a result, again, we feel very comfortable going into the third and fourth quarter relative to our leverage position. That is, it's traditionally higher in the first half of the year.

[Analyst at TD Securities]

Okay. Understood. Thanks. That's very helpful. Just another one maybe on the fee rate. The net fee rate appears to be trending down sort of over the last few quarters. Just wondering if that's a function of AUM mix. Fixed income has increased slightly relative to equities. Maybe even just a mix shift possibly within the equities AUM. Just what overall appears to be driving the reduction in fee rate?

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

That's a great question. There's a couple of things there. You're right on the Public Markets side, where we are seeing a shift from higher fee equity strategies to some lower fee fixed income. There's definitely a shift there in mix that you don't necessarily see through the AUM in terms of the flows. The other element is also the non-deployed capital in Private Markets, of which, as you can see, we have a healthy pipeline. The non-deployed is actually in our AUM number, but there are some of those projects by which we're not collecting revenue on.

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

Again, there's an inflation of the denominator now as a result of that amount being included in our AUM, but we have yet to start collecting fees on that. You'll see some stuff in the commitment or transaction fees in terms of revenue, but you're not going to see anything in the base management fee revenue line at this point.

[Analyst at TD Securities]

Okay, great. Helpful as well. If I could just squeeze one more quick one in. Just the sort of flows pipeline and outlook for the second half of the year. I know you mentioned a further CAD 1.5 billion redemption request expected to come out in the second half of the year. Anything incremental to that that you're aware of at this point?

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

No, at this point. That is on one of the sub-advised mandates that we spoke about already. As I say, we know that that one's coming in in the next quarter. Beyond that, we have one larger equity mandate as well where we know that the client will be redeeming. This is not a leakage or a transfer of any sort, but it's roughly a CAD 500 million outflow that we're expecting in the third quarter.

[Analyst at TD Securities]

Okay, great. Thanks very much. That is all for me.

[Operator]

We have no further question registered at this time. I will now turn the call back over to Mr. Mousavian. Please go ahead.

[Amin Mousavian, Senior Vice President, Head of Treasury and Investor Relations at Fiera Capital]

Thank you. 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. We know 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 today's conference call. You may now disconnect. Thank you.

Participants

Executives

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

Analysts

• Etienne Ricard, Equity Research Analyst at BMO Capital Markets
• Bart Dziarski, Diversified Financials Analyst at RBC Capital Markets
• Analyst at TD Securities