"When things are easy, it’s not fun," says the veteran Quebec financier, who at 78 shows no sign of retiring.
Veteran Quebec financier Jean-Guy Desjardins is taking the concept of active retirement to a new level.
Desjardins, 78, returned last month for a second stint as chief executive of Montreal-based Fiera Capital Corp., the asset management company he founded in 2003. He replaced Jean-Philippe Lemay, who abruptly left the firm barely a year after succeeding Desjardins as CEO. In announcing the leadership change, Fiera didn’t outline the reasons for Lemay’s departure.
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The investment entrepreneur, who started Fiera after building up TAL Global Asset Management into a major independent force and selling it to the Canadian Imperial Bank of Commerce, takes over a company whose stock price has stagnated in recent years amid investor withdrawals. Assets under management have slumped to $158.5 billion as of Dec. 31 from $169.7 billion at the end of 2020.
Desjardins says he plans to run Fiera while performing the other day jobs he was already carrying out — overseeing tactical asset allocation, managing about $1 billion of money for wealthy individuals and helping to run several credit and real estate funds. He wouldn’t have it any other way.
“A CEO who rolls up his sleeves can be a more effective leader,” Desjardins, who spent the past year serving as Fiera’s executive chairman, said in an interview. “I was already very busy because I had multiple responsibilities in the organization. I’m estimating that (the CEO role) will add about two hours to my workday.
“I’ve always done it like this. In managing money for high-net worth individuals, (investment counsellor) Rodrigue Lussier does the day-to-day management and I bring the investment expertise. There’s nothing new for me in doing all this simultaneously.”
Desjardins flatly dismisses the notion that he might be a transition CEO.
“I’m here for a minimum of three years,” he says.
Desjardins insists his return as CEO wasn’t his call, but rather the result of a “reflection” undertaken by Fiera’s board of directors. Board members felt that a more experienced leader would be best suited to guide the company through an expected turbulent period on stock and bond markets as multiple economies teeter on the brink of recession, according to the new CEO.
Fiera’s directors “are worried about 2023 and 2024,” Desjardins said. “Faced with this great uncertainty, knowing that there will be a lot of instability and volatility, they asked themselves whether Fiera had the kind of leader we needed to go through this storm. They concluded that they would be more comfortable if somebody who is more experienced, with extensive knowledge of investment strategies, was at the helm. This wasn’t a no-confidence vote against JP. If the macroeconomic outlook had been different, the board would probably have never asked this question.”
“I didn’t initiate this. There is a perception out there that Jean-Guy is not capable of letting go, but the truth is that this isn’t the case at all.”
As CEO, Desjardins says he plans to focus on expanding so-called private market strategies such as real estate or agriculture funds, which generate higher fees for Fiera than public-market investments. While private-market holdings represent about 13 per cent of Fiera’s total assets, they account for about 30 per cent of the company’s revenue and an even higher share of pre-tax profit, Desjardins said.
Fiera’s board recently approved a plan aiming to hit certain milestones by 2025, though Desjardins declined to share specific figures.
“We want to grow assets under management, revenue” and a measure of pre-tax profit known as adjusted EBITDA, he said. “The engine of this growth will be our private market assets, and our strategy is mostly an organic growth strategy. It requires changes and a refocusing of certain activities.”
Despite the growth objectives, Desjardins is “very bearish” on stock markets over the next 12 to 18 months, calling for a drop of 15 per cent to 20 per cent amid persistently high interest rates. While Canada’s consumer price index has recently cooled off, Fiera’s CEO predicts the Bank of Canada — together with other central banks — will need to keep raising interest rates to bring inflation to less than two per cent.
Although the recent slowdown in price pressures is “encouraging, going to two per cent inflation will require additional tightening from central banks,” he said. “Average wage increases are going to be about 4.5 per cent this year. It’s impossible to get to two per cent inflation if wage increases are at current levels. So I think we’re going to see another wave of interest rate increases this year, which is going to break the markets. When the recession hits, corporate profits are going to fall and markets will react negatively.”
Longer term, however, Desjardins is more optimistic.
“If we can solve the economic imbalances, after that we can embark on another up cycle of eight or nine years,” he said.
“It’s a very stimulating context to be back. When things are easy, it’s not fun.”
ftomesco@postmedia.com