Maxime Menard wants Fiera management to buy the 7 million+ shares of Fiera that Desjardins is selling
Maxime Ménard says that Fiera Capital’s management teams are getting ready to buy into their firm. Ménard is the President & CEO of Fiera Canada and Global Private Wealth of Fiera Capital. The purchase opportunity he says management now has before them comes from the block of 7,257,960 Fiera shares that Desjardins Financial Holding Inc., recently said they are planning to exit. It’s an exit that has raised questions about risks to the long-term position of Fiera Capital Founder, Chairman, and CEO Jean-Guy Desjardins. Menard, however, prefers to position Desjardins Financial’s exit as an opportunity, not a setback.
Ménard spoke to WP about why Desjardins decided to exit their position in Fiera, what it means for the ongoing operations and growth goals at his firm. He emphasized throughout that he sees this sale as an opportunity for Fiera’s management team and Fiera Capital as a whole.
“It came at a point where we've had mutual conversations where management is looking for an opportunity to put together an ability to buy the block. This is a fairly illiquid position, so having a block available for management to buy in, is something I strongly believe in,” Ménard says. “I think having additional people buying into the stock is going to create lots of positives.”
Ménard says that the management team has not yet put together their final offer for the Desjardins Financial position, but that they are “working on putting everything together.”
The Desjardins Financial holding in Fiera, Ménard notes, was a longstanding position entered around the time Jean-Guy Desjardins founded Fiera. While the position had been held for a long time it was not a ‘core position’ for Desjardins Financial. Ménard notes that he can’t speak to exactly why Desjardins Financial opted to exit their position but says there may have been conversations about whether they were going to ‘double down’ on their investment or not. They elected not to.
Given some of Fiera’s ambitious growth plans — which include the appointment of regional management teams led by regional CEOs like Menard — Ménard is quick to emphasize that this exit will not impact Fiera’s current plans. He cites Fiera’s existing AUM of over $165 billion to argue that the firm is already at scale. That means the current growth plans should not require the kind of ‘over-investment’ that a firm needs to get up to that scale. Moreover, he notes that while Desjardins Financial are exiting their Fiera holdings, they are not ending their commercial relationship with Fiera Capital.
“They’re a good client of ours and we have secured those assets,” Ménard says.
Following the announcement in late April, Fiera’s stock dropped by around ten per cent. Ménard puts that move in the context of relatively strong performance by Fiera stock year to date, which is up over 17 per cent since January. He notes, as well, that broad equity markets pulled back in April.
As Fiera’s management team puts together their offering for the Desjardins Financial position, Ménard says there are ongoing conversations about how they can grow their asset base and reinvest in their business. Ménard wants Fiera to attract “some of the best portfolio management teams in the world” and he thinks that Fiera’s technology, operations, and distribution are enough to attract that talent. The opportunity to purchase these shares, Ménard says, are opening a conversation with more internal stakeholders about the focus and direction of Fiera as it moves forward.
“It's creating discussions around the potential of the organization and a lot of employees have asked for ways to buy into the company. So what this has created is a refocus around the shareholder perspective,” Ménard says. “From a long-term perspective, we have solidified key employees around this. We've been able to communicate our strategy and we actually just finalized our five-year plan in terms of our growth through an increase in AUM, innovations, and investing in our business. Our shareholder base allows us to be able to buy that position, to have management committed with the shareholders, and also have a very solid five-year plan tied into the performance of those shares.”
