Fiera limits cashouts on $1.5B fund
One of Canada’s biggest money managers is freezing redemptions in a large debt fund and warning that some borrowers may miss interest payments.
Fiera Capital Corp. has called investors to inform them it has gated its Diversified Lending Fund, which has about $ 1.5 billion under management, according to people familiar with the situation.
The fund is managed by chief investment officer François Bourdon and two others.
The fund invests in the residential and commercial construction sector through limited partnerships ( LPS) with various partners that specialize in lending solutions.
The fund also puts money into partnerships that offer private loans to companies and other types of loans.
Nearly 64 per cent of the fund’s loans are for housing projects, as of the end of February; 91 per cent are in Canada or the U.S.
“The Diversified Lending strategy has been progressively positioned for a cycle that was getting longer in the tooth, but not for a recession,” the company said in a fund document on its website.
The fund was created in 2008 and has generated net annualized returns of 6.55 per cent since inception, according to the company’s website. This year the fund was up 1.69 per cent in the first quarter.
Montreal- based Fiera, which has 750 employees in North America and Europe, managed $ 170 billion at the end of 2019.
Its largest revenue line comes from handling institutional money. About 45 per cent of its assets under management are in fixed income.