Senior management could partner with financial backer to buy shares
Fiera Capital shares dropped 4% Wednesday as investors weighed the potential impact of one of the $162 billion AUM wealth firm’s largest shareholders pulling out.
Desjardins Financial Holding Inc., an indirect wholly owned subsidiary of Fédération des caisses Desjardins du Québec, announced Wednesday that it wants to sell its entire stake in Fiera Holdings Inc. and its units in Fierra LP, the entity that holds more than 20% of Fiera Holdings and controls the company through special voting rights that allow it to appoint two thirds of the board.
The sale represents 7,257,960 Class A subordinate voting shares or around 6.8% of the company.
The decision could open the door to activist investors and puts chairman and CEO Jean-Guy Desjardins’ stewardship of the firm at risk. The voting agreement means that if the limited partnership falls below 20% for 90 days, the special terms end and give all shares equal rights to choose directors.
The CEO stepped down early in 2022 but a succession plan was unsuccessful, and he returned. He recently spoke with Wealth Professional about his plans for the firm including decentralization in favour of a regional leadership.
The limited partnership agreement gives existing unitholders first refusal on the securities being offered for sale before the Class A shares they represent are sold.
“Senior management of the company is currently considering making an offer, together with a financial partner, to acquire the Offered Securities from Desjardins. There can be no assurance that such transaction will materialize,” said a statement from Fiera Capital.
“Today’s news is potentially negative in that a significant shareholder is seeking to exit their position as it is also unclear what implications this may have for assets that Fiera manages on behalf of Desjardins,” RBC Capital Markets analyst Geoffrey Kwan said in a client note.
Fiera Capital has been expanding internationally in 2024 with new offices in the Middle East and Europe. It also lost a senior leader in its capital markets team to Richter.
