Times are difficult for Quebec's largest financial firm, Fiera Capital. Its founder Jean-Guy Desjardins believes that in Jarislowsky Fraser he has found the person who can turn things around.
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Maxime Ménard has been with the company founded by the legendary Stephen Jarislowsky for more than 20 years and takes over the management of Fiera Canada, the Montreal company's largest division.
Mr Ménard, 48, had been CEO of Jarislowsky Fraser since late 2018.
“It's a great acquisition for Fiera,” enthuses Mr. Desjardins, 79, during an interview with Le Journal.
“Having the opportunity to work with another entrepreneur is a privilege. I had the opportunity to work with Mr. Jarislowsky, now with Jean-Guy Desjardins. They are probably the two largest financial entrepreneurs in the country,” says Maxime Ménard.
Next CEO?
Mr. Desjardins is cautious when asked whether Mr. Ménard will succeed him at the helm of Fiera.
“There is nothing written in the sky,” he said.
We understand it. In early 2022, Fiera appointed Jean-Philippe Lemay as CEO, but he only stayed in the position for a year. Jean-Guy Desjardins took over management of the company in January 2023.
“When the board asked me to come back, I agreed to the agreement that I would come back for three years,” he explains.
One of his first tasks was to prepare the next generation of CEOs to prevent a repeat of the 2022 misstep.
“I presented the board with a plan with four internal people that I identified as potential successors. By joining, Maxime gives us a deeper insight into the possible choices,” says Mr. Desjardins.
Capital flight
Maxime Ménard will have quite a challenge to overcome at Fiera. For two and a half years, the law firm has lost more clients than it has won. Result: Assets under management have been stagnant since 2021. As of September 30, they amounted to $155 billion, a decline of 9% compared to three months earlier.
One of the main reasons for this capital flight was the departure in 2022 of Nadim Rizk, Fiera's star manager. He oversaw about a third of the assets entrusted to the company, or $60 billion, mostly on the stock exchange in the United States and Europe were invested.
Fiera has entered into a sub-management agreement with Mr. Rizk's new company, PineStone. Fiera customers can benefit from PineStone's services while maintaining connections with Jean-Guy Desjardins' company.
The problem is that some customers prefer to deal directly with PineStone without using Fiera. This is particularly true for National Bank Investments, which is scheduled to transfer no less than $5.6 billion more to PineStone by early 2025.
However, Mr. Desjardins is reassuring. Fiera will continue to manage more than $10 billion in stocks for Quebec's largest bank.
“We assume that a lot will change in this regard after 2024,” he predicts. Customers who wanted to go directly [chez PineStone] will have made it.”
Blow bar
Fiera still needs to take a step forward, agrees Mr Ménard.
“It will be about twisting the story, restoring momentum and harnessing the power of our investment platform,” he explains.
Jean-Guy Desjardins makes no secret of it: Fiera has difficulty highlighting its strengths to potential customers.
“We should have a larger market share considering the competitiveness of our platform,” he claims.
Talents that shine everywhere
Fortunately, Fiera is very well established in Quebec. It employs around 320 of its 830 employees there and manages around $50 billion in customer assets here.
Fiera Capital's headquarters in Montreal. Photo Sylvain Larocque
“Fiera Capital is an extremely important financial institution for Quebec,” emphasizes Mr. Desjardins. After the Caisse de dépôt, we are second only to the Caisse de dépôt in terms of presence on the market.”
Better yet, thanks to the company's presence in the United States, Europe and Asia, Fiera's Quebec investment professionals reach all corners of the world.
“Our customers outside of Canada buy the expertise of the people who are based here,” says Jean-Guy Desjardins proudly. We export the talent of our managers abroad. I actually find it frustrating that people don’t understand the significance it can have.”
Fiera Capital in brief
- Founded: 2003
- Employees: 830
- Assets under management: $155 billion
- Stock market performance: -30% in 2023 (-20% including dividends)
- Offices: three in Canada, three in the United States, three in Europe and two in Asia