Desjardins Financial sells minority stake in Fiera Capital to company insiders

Fiera Capital Corp. founder Jean-Guy Desjardins is growing his ownership stake in the Montreal money manager.

Mr. Desjardins, alongside Fiera Canada chief executive Maxime Ménard, other senior managers and two board members, acquired 6.8 per cent of Fiera from Desjardins Financial Holding Inc. for roughly $53-million, the company announced on Friday. Desjardins Financial, an indirect wholly owned subsidiary of Fédération des caisses Desjardins du Québec, has been an investor in Fiera since the company was founded in 2003 and first announced its divestment plans in April.

Because the shares were held through a limited partnership that owns 20.7 per cent of Fiera Holdings Inc., other members of the LP, primarily Mr. Desjardins, had the right of first refusal. At the time, Fiera said management was looking to get a deal done by mid-May.

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.

The transaction values Desjardins’ stake at $7.25 per share, representing a 7.1-per-cent premium from the $6.77 per share closing price of Fiera’s Toronto Stock Exchange-listed stock on Thursday.

Mr. Desjardins is the largest participant in the deal, with his contribution totalling $14-million. Former Nortel Networks CEO Jean C. Monty and former CIBC Asset Management vice-chair John Braive – who are both current members of the Fiera board of directors – are each contributing $7.25-million.

Mr. Ménard is paying $5-million and Fiera Private Markets CEO John Valentini is paying $4-million. Chief legal officer Gabriel Castiglio, chief investment officer Jean Michel, chief financial officer Lucas Pontillo, Fiera USA CEO Eric Roberts, Fiera Asia CEO Robert Petty and Fiera Europe, Middle East and Africa CEO Klaus Schuster will each invest $2.5-million into the deal.

The deal is also the first in a series of planned initiatives, Fiera spokesperson Yasmine Sardouk said in an interview, including an expanded employee stock sharing program.

“We want to structure initiatives that are going to enable more employees to participate in our equity,” she said. “We want to have a program that is open to most if not all employees at Fiera.”

More details on that program will be released within the next 12 months, Ms. Sardouk said.

“We have a very strong outlook on the future of Fiera and this buyback ensures that our leadership also has more skin in the game,” she said.

The investments Desjardins has in Fiera funds are not affected by the transaction, Desjardins spokesperson Chantal Corbeil said in April when the divestment plan was first announced. Fiera had a total of $162-billion in assets under management as of the end of last year.

In early 2024, Fiera hired Mr. Ménard to run its Canadian operations, which account for roughly 65 per cent of the company’s business, as well as the company’s global private wealth business.

Mr. Ménard is widely seen as a top succession candidate for Mr. Desjardins, who 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.