Trump won’t slow Fiera expansion bid
• The CEO of Fiera Capital says he’s not worried about investing in a United States with Donald Trump as president, even as the Montreal- based investment firm plans to more than double its assets under management to $200 billion in 2020 fuelled mostly by growth south of the border.
Trump’s extreme protectionist rhetoric has included threats to modify or cancel trading relationship with foreign entities, and his detractors believe his proposed economic policies could cause anything from volatility to disaster on stock markets — not encouraging forecasts for a company looking to grow.
But in order for Fiera to succeed, Jean- Guy Desjardins says it’s inevitable that more than half of its business will be in the U. S. The Montreal- based company nearly doubled its exposure recently, to about 42 per cent, with the acquisition of Ohio- based Apex Capital Management in February.
“I’m more interested in knowing who will be treasury secretary than who will be president,” Fiera’s chief executive said in an interview following the company’s annual shareholder meeting last Friday.
Desjardins says that if Trump, the presumptive nominee of the Republican Party, does win the elections, he’ll put forward candidates for the Treasury of the Secretary, but the final selection will ultimately need approval from the U.S. Senate.
“He cannot come up with somebody who would be an inappropriate candidate. The system will block him,” Desjardins added. “He’ll have to come with another one until he comes up with a decent candidate. That’s where the economy’s managed, that’s where the economy’s run.”
In the coming years Fiera plans to grow four “pillars” in the U. S. — infrastructure, real estate, a family of hedge funds and a credit business.
In the Canadian institutional market, Desjardins s ays most i ndependent money managers survive on defined- benefit pension plans, but almost all employers will shift to defined-contribution plans over the next two decades.
“What’s left for an independent money manager in Canada? A little piece of the high- net- worth market, a small piece of the retail market and a large piece of a shrinking market,” he said.
Desjardins says it will be difficult for an independent Canadian money manager to survive over the next 20 years, with commercial banks already tying up the lion’s share of the retail and high-net-worth markets.
But he adds: “I’m not betting against them.”
Just five years ago, Fiera had $ 29 billion in assets under its management. This rose to $ 87 billion by early 2015 and reached the $100-billion mark early in the year. To reach the $ 200- billion target, Desjardins says Fiera has three and a half years to acquire about $ 20 billion in assets, though the firm has the capabilities to meet this in 18 months.
He also says Fiera assumes it will grow organically by five per cent a year, while right now it’s clearing more than nine per cent.
The firm is looking at building emerging market capabilities, which at the moment it doesn’t have. Desjardins says Fiera has been “dating” a firm with this specialization for the past 18 months, though for competitive reasons he wouldn’t say where or who the company is.
“As long as we can marry and merge with a capable emerging market team wherever it is it doesn’t matter geographically,” he said.