Fiera Capital Corp., FSZ-T one of Canada’s largest independent money managers, is parting ways with chief executive officer Jean-Philippe Lemay only one year into his tenure, and replacing him with the company’s founder.
Jean-Guy Desjardins, Fiera’s founder and executive chairman, will retake the CEO role he relinquished in January, 2022, effective immediately, the Montreal-based company said Monday. Fiera gave no specific reason for the leadership change and did not say whether Mr. Lemay quit or was let go.
Many companies experience succession strife when their founders hand over some measure of management control. In the case of Fiera, however, Mr. Desjardins had been grooming Mr. Lemay for a decade before the board handed him the CEO job 12 months ago.
Yet Fiera has struggled of late, with the asset manager reporting net redemptions in each of the past six quarters – which means investors are pulling more money out of its funds than they are putting in.
In an interview, Mr. Desjardins said he was not angling to take back control. “It’s not because I was getting itchy,” he said. “You can absolutely 100 per cent be assured that I did not initiate [my return].”
Instead, he said the board was worried about a volatile business climate, so the directors thought it would be prudent to have someone “who has a lot of experience in financial markets and has a deep understanding in the macroeconomic environment.”
“You can add to that some preoccupation about some leadership vacuum,” Mr. Desjardins said, referring to board concerns about Mr. Lemay’s tenure.
Rival independent money managers, including AGF Management Ltd. and IGM Financial Inc., have also struggled but Fiera’s shares have suffered much more over the past five years, falling 29 per cent. (CI Financial Corp., however, has fared worse than Fiera, with its shares down 47 per cent.)
On top of fund outflows, Fiera recently faced the departure of a key portfolio manager, as well as the sale of 11 per cent of its shares by a major institutional holder.
In August, 2021, Nadim Rizk, who led Fiera’s global equity team, left the company and set up his own asset manager, StonePine Asset Management Inc. At the time, Fiera negotiated a subadvisory relationship with the new firm so that it would still manage Fiera client money for at least two years, but the departure created uncertainty. Mr. Rizk managed $60-billion in assets at the time, roughly one-third of Fiera’s total assets under management.
Five months later, in January, 2022, Natixis Investment Managers sold its 11-per-cent stake in Fiera at about $9.80 per share. The French investment giant originally acquired its stake by purchasing shares from National Bank of Canada and Mr. Desjardins at about $12 apiece.
Mr. Desjardins launched Fiera in 2003 and built it through acquisitions to become an international investment player. The company had $158.3-billion in assets under management at the end of September, 2022, but the acquisition spree saw Fiera take on a significant amount of debt.
Facing headwinds, the company announced a restructuring in June, 2020, that changed its focus from geographic silos, such as Canada and the U.S., to product groups such as public markets and private markets. The latter has been a major focus in recent years, because investors have shown a growing appetite for assets such as real estate, infrastructure, private debt and private equity.
In an interview with The Globe and Mail last year, Mr. Desjardins said he believed Mr. Lemay had the potential to be a better CEO than he was.
“If the past is any indication of the probability that he will succeed, he will. He will succeed. He will grow into it,” Mr. Desjardins said, noting that Mr. Lemay had taken on increasingly senior roles in the company over time, including chief operating officer.
Fiera announced several other leadership changes Monday, giving several senior executives added responsibilities. Among them: John Valentini, a long-time lieutenant of Mr. Desjardins, was named executive director and president and chief executive officer of Fiera’s private markets unit.