Jean-Guy Desjardins, global CEO and founder of Fire Capital looks out the window at the Fiera Capital offices in Montreal, on Jan. 8.Evan Buhler /The Globe and Mail
Montreal money manager Fiera Capital Corp. FSZ-T is losing one of its largest shareholders, though the loss of Desjardins could be a gain for Fiera founder Jean-Guy Desjardins.
Desjardins Financial Holding Inc., an indirect wholly owned subsidiary of Fédération des caisses Desjardins du Québec, announced plans Wednesday to sell its 6.8-per-cent stake in Fiera.
Because the shares are held through a limited partnership that owns 20.7 per cent of Fiera Holdings Inc., other members of the LP, primarily Mr. Desjardins, have the right of first refusal. According to the company, an offer is already being prepared.
“Management is actively structuring an offer and looking to get it done within the next couple of weeks,” Fiera spokesperson Yasmine Sardouk said in an interview. “This is very exciting for the management team.”
Fiera’s Toronto Stock Exchange-listed stock fell by more than 10 per cent on Wednesday after Desjardins disclosed its intention to divest, closing at $6.82 a share.
Royal Bank of Canada analyst Geoff Kwan, who covers Fiera with the equivalent of a hold rating and a price target of $7 a share, said in a note to clients on Wednesday that the “least disruptive and best outcome” would be for the management bid to be successful. While Mr. Kwan said it was unclear what implications the sale may have for the assets that Fiera manages on behalf of Desjardins, Ms. Sardouk said the investments Desjardins has in Fiera funds would not be affected.
“Fiera and Desjardins remain very strong partners and there is no change to our commercial relationship,” she said.
Fiera Capital had a total of $162-billion in assets under management as of the end of last year.
Desjardins spokesperson Chantal Corbeil said in an e-mail that Fiera “remains an important business partner for Desjardins (the funds it manages on our behalf).”
“The sale of these shares does not call into question our business relationship with Fiera,” Ms. Corbeil said.
Fiera’s Ms. Sardouk said the reason Desjardins was choosing to sell now was simply to capitalize on the current value of the company’s stock. The price of Fiera’s stock has jumped by more than 57 per cent over the past six months, even after accounting for Wednesday’s decline.
Despite holding barely one-fifth of the company, the limited partnership has the right to elect six directors to the nine-member Fiera Capital board. That effectively allows the LP to exercise control over Fiera.
In early 2024, Fiera hired veteran money manager Maxime Ménard as chief executive officer of its Canadian operations, which account for roughly 65 per cent of the company’s business.
Mr. Ménard is widely seen as a top succession candidate for Mr. Desjardins, who founded the company in 2003 and is the current global CEO and chair of the Fiera Capital board. Mr. Desjardins, 79, briefly retired in early 2022 only to make a surprise return one year later.
Jean-Philippe Lemay, whom Mr. Desjardins hand-picked as his successor after having spent a decade being groomed for the role, left Feira in January, 2023, under circumstances that remain unclear.