Fiera Capital Corporation

Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to Fiera Capital's earning call to discuss financial results of the fourth quarter of 2024. All lines have been placed on you to prevent any background noise. After the speaker's prepared remarks, there will be a question and answer period. As a reminder, this conference call is being recorded. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. Thank you. I will now turn the conference over to Ms. Marie-France Gay, Senior Vice President, Treasury and Investor Relations. Ms. Gay, you may begin your conference.

Thank you, Emily. Good morning, everyone. Bonjour à tous. Bienvenue à l'appel de conférence de FIERA Capital, Sécurité des résultats financiers du quatrième trimestre de 2024. Welcome to the FIERA Capital Conference Call to discuss our financial results for the fourth quarter of 2024. Note that today's call will be held in English. Before we begin, I invite you to download a copy of today's presentation, which can be found in the Investor Relations section of our website at ir.fieracapital.com. Also note that 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. I would ask you to take a moment to read the forward-looking statements on page two of the presentation. On today's call, we will discuss our Q4 2024 results, starting with an update on our AUM flows followed by highlights of our public and private markets platform, as well as our private wealth business. We will then review our financial performance. Our speakers today are Mr. Jean-Yves Desjardins, Chair of the Board and Global CEO, and Mr. Lucas Pontillo, Executive Director and Global CFO. Also available to answer questions following the prepared remarks will be Jean-Michel, President and CIO Public Markets, and Maxime Minard, President and CEO of FIERA Canada and Global Private Wealth. With that, I will now turn the call over to Jean.

Thank you, Marie-France. Good morning, everyone. Thank you for joining us today as we report our results for the fourth quarter and the full year of 24. So global equity markets had an impressive year in 2024. with investors spending much of the year bracing for a soft economic lending and aggressive rate cuts. Stocks lost some gains towards year-end as pricing pressures and an inflationist policy agenda from the U.S. administration brought into question the extent of rate cuts from the Federal Reserve in the coming year. Fixed income markets also generated positive results in 2024, but retreated somewhat towards the end of the year. The impact of the Federal Reserve's 100 basis points of rate cuts in 24 was countered by concerns about persistent inflation, with the potential for wider budget deficits and higher tariffs, adding to the upside inflation risks. That saw investors rein in their expectations for rate cuts in 2025. Canadian bonds outperformed their U.S. counterparts, with the spread between the Canadian and U.S. bond yields widening drastically. Against the backdrop of higher markets, our assets under management ended the year at $167.1 billion, representing an increase of $1.6 billion for the quarter and an increase of 5.4 billion or 3.3% for the year. Assets in our private markets platform grew 1% during the quarter and nearly 7% during the year, to end the year at 19.7 billion, driven by new mandates and positive market action. In our public markets assets under management, of $147.4 billion increased 1% during the quarter and 3% for the year, as market appreciation was partly offset by net outflows which were largely Pinestone-related. Excluding assets under management sub-advised by Pinestone, our public markets assets increased 2% for the quarter and 5.5% for the full year. I will now turn to highlights of our commercial and investment performance across our asset classes. So starting with public markets platform. Public markets, excluding assets under management sub-advised by Pinestone, saw good cross-mandate activity in the quarter, with more than 900 million of new mandates awarded, primarily from clients investing in our global and large-cap equity mandates. We saw positive net organic growth in the equity platform, excluding pinestone, for both the quarter and the year. Growth mandates were offset by lost mandates and negative net contributions from clients redeeming from fixed income mandates, resulting in approximately $800 million of net outflows for the quarter. With respect to assets under management, sub-advised by Pinestone, net outflows were 1.3 billion, 300 million of which were outflows transferred directly to Pinestone, and the balance being mostly related to client rebalancing and moving to other managers. As we previously announced, in January of this year, 5.7 billion of Pinestone equity mandates from Canoe were withdrawn and transferred directly to Pinestone. Client concentration in Pinestone has been reduced meaningfully over the last two years. Canoe was the last large single mandate client. Of the 25 largest clients currently invested in Pinestone, under one-third are single mandate clients with assets under management greater than $1 billion. For the rest of 2025, we expect direct transfers to Pinestone could be up to an additional $1 billion. We continue to execute on our decentralized distribution model and with large fine stone redemptions now behind us, work towards returning to a sustained level of net inflows going forward. Now turning to investment performance in public markets. Despite it being a challenging quarter for outperformance, many key public market strategies generated alpha over the one-year period, and nearly all outperformed over the longer three- and five-year periods. Our Canadian fixed income strategies continued to perform well, with our strategic core and integrated core strategies adding value for the quarter, and all three of our flagship Canadian fixed income strategies adding value over the one-, three-, and five-year periods. Foreign fixed income strategies encountered a more challenging fourth quarter. The global multi-sector income strategy lagged its benchmark in the fourth quarter, although it still managed to add more than 200 basis points of value added over the one-year period. The high-grade core intermediate fund and the tax-efficient core plus fund also came in below benchmark in the fourth quarter, but continued to outperform over the three and five-year periods. While 2024 was a strong year for global equity markets, it was a challenging year for outperforming, as more than half of the 25% gain of the S&P 500 for the year were driven by the Magnificent Seventh. Under exposure to this group largely resulted in returns that lagged benchmarks. The U.S. equity market is currently near its most concentrated level in 100 years, with the top 10 stocks in the S&P 500 comprising more than 35% of the index, creating a very challenging environment for generating short-term alpha relative to that index. After a long record of outperformance, the three strategies sub-advised by Pintstone Asset Management underperformed their benchmarks for the quarter. And for the year, the U.S. and global strategy underperformed, while the ETH strategy added value, mainly as a result of their underexposure to the Magnificent Seven and industrials. Our Canadian equity strategy also underperformed its benchmark for the quarter, mostly as a result of non-exposure to a security which rallied more than 60% in the second half of 24, but however remains in the top quartile for the period versus its peer group. Despite a rare period of underperformance for our frontier markets strategy, in the fourth quarter, The strategy continues to deliver notably strong relative performance across all medium and long-term periods. Lastly, the emerging market select strategy fell slightly short of its benchmark in the fourth quarter, despite significantly outpacing it over the one-year period and two years. The strategy continues to pose an impressive track record, outperforming its benchmark. by over 9.5% since its inception in 2021. So before moving on, I am pleased to highlight that two FIERA funds and one FIERA strategy have been recognized as top performers in the Global Manager Research 2024 Top Performer Awards. This is the second consecutive year Sierra Capital has been recognized as a top performer by global manager research and is a testament to the effectiveness of our public market strategies, all of which are built on diligent research, proactive management, and a strong commitment to sustainable growth. Now turning to our private market platform. Private markets delivered positive net organic growth during the quarter of approximately 200 million and close to 1.4 billion for the year after returning capital of 184 million and 556 million respectively to investors. So growth was driven by new mandates of more than 300 million for the quarter and $1.7 billion for the year, primarily from clients into real estate, private debt, and agriculture. Close to $600 million was deployed in the quarter, and we maintain a pipeline of roughly $900 million available for future deployment into future opportunities. So with respect to investment performance, our key private market strategies perform well in the quarter with nearly all strategies generating positive returns for the quarter and producing absolute returns of 4% to 12% for the year. Private equity. performed well in the quarter and produced a one-year return of 11%. Our approach here remains focused on selective investment in high growth sectors with particular investor interest in technology and health services. Our global agriculture strategy performed well in the quarter and generated a 9% return for the year, with the strategy maintaining a robust pipeline of new partnerships and potential bolt-on opportunities. Our infrastructure strategy generated a positive return in the quarter and returned 9% for the year. In real estate, markets in Canada and the UK showed further evidence of recovery in the quarter after weathering a difficult valuation environment from 2022 to early 24, enhanced by rate cuts and improved liquidity conditions. We remain strategically heavily weighted towards multi-residential and industrial sectors with limited exposure to the still-challenged office sector. Lastly, nearly all of our private credit strategies generated positive returns for the quarter. In particular, our real estate debt strategies performed well, generating attractive and low volatility returns, as well as steady cash distributions. Central banks in the markets that we operate have continued to cut rates and signal for more potential rate cuts over the coming months, and we are continuing to see demand for loans ramp up as lower rates and costs are allowing more projects to become economically attractive. Private wealth assets under management increased by approximately 300 million in the fourth quarter to close at 14.6 billion. Assets under management were up close to 1 billion on the year, driven by market appreciation and approximately $700 million in gross new mandates. We continue to refine and simplify the theme and value proposition to strengthen client relationships and drive sales growth. Now with that, I will turn it over to Lucas to review our financial performance.