| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Fiera Capital expects a 'Sustained Inflation' environment over the next 12-18 months, with inflation remaining persistently above central bank targets driven by Middle East conflict energy shocks, AI boom supply-side stress, and trade policy uncertainty. While the tentative U.S.-Iran peace deal has eased the worst-case outcomes, risks remain skewed to the upside. The Federal Reserve is likely to remain on hold rather than tighten aggressively, allowing the economy to shift towards a trend-like pace rather than stagflation or recession. This environment argues for a defensive stance on equities and bonds, with the firm maintaining underweight allocations to both asset classes. Cash provides a place to hide given increased market turbulence potential. The challenging backdrop for traditional 60/40 portfolios underscores the case for private markets strategies, with the firm maintaining overweight allocations to private credit, real assets, and private equity. These non-traditional sources provide relatively stable return profiles, lower volatility, inflation protection, and diversification benefits with low correlations to public markets. The firm has reduced traditional capital appreciation exposure by 10%, eliminating emerging market equity and reducing international equity, while increasing cash to 17.5% from zero.
The macroeconomic landscape is dominated by persistently elevated inflation and structurally hawkish central banks that limit upside for the global economy, arguing for a defensive portfolio stance emphasizing private markets strategies over traditional 60/40 allocations.
The manager expects a 'Sustained Inflation' scenario (45% probability) over the next 12-18 months, where inflation remains persistently elevated above central bank targets but well-anchored expectations allow the Federal Reserve to live with above-target inflation rather than tighten aggressively. Economic conditions are expected to shift towards a disinflationary, trend-like pace rather than stagflation or recession. However, upside risks to inflation remain from potential Middle East re-escalation, AI boom supply-side stress, and trade policy uncertainty. The environment argues for a defensive stance on equities and bonds, with cash and private markets strategies providing better risk-reward propositions.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 17 2026 | 2026 Q2 | - | AI, asset allocation, Geopolitical Risk, inflation, private markets, rates, Scenario Analysis, Trade Policy | - | Fiera Capital expects sustained inflation over 12-18 months driven by energy shocks, AI supply stress, and trade uncertainty, keeping central banks on hold and growth at trend. The firm maintains defensive positioning with underweights to equities and bonds, overweights to private credit, real assets, and private equity, and 17.5% cash. Private markets strategies provide superior risk-reward versus traditional 60/40 portfolios in this challenging environment. |
| Apr 15 2026 | 2026 Q1 | - | energy, Geopolitical, inflation, Middle East, oil, private markets, Stagflation, Trade Policy | - | Fiera Capital expects stagflation driven by Middle East energy disruption and trade tensions. Oil prices remain elevated despite potential ceasefire, while tariffs stoke inflation. The firm takes defensive positioning with underweight equities and bonds, favoring private credit and real assets for stable returns. Traditional 60/40 portfolios face headwinds as bonds lose safe-haven status amid persistent inflation pressures. |
| Dec 31 2025 | 2025 Q4 | - | Asset Management, Capital Allocation, global, infrastructure, private credit | - | Fiera Capital executed strategic transformation under new CEO leadership, growing AUM to C$167 billion while streamlining operations and enhancing infrastructure and private credit capabilities. Despite challenging market conditions with high capital costs and economic uncertainty, the firm delivered revenue growth and margin expansion through disciplined resource allocation and operational focus. |
| Dec 31 2024 | 2024 Q4 | - | Agriculture, Asset Management, global, infrastructure, private credit, private markets, real estate | - | Fiera Capital grew global AUM to $167.1 billion in 2024 through diversified platform strength. Private Markets generated 35% of revenue despite smaller AUM share, driven by new allocations across credit, infrastructure and agriculture. Public Markets delivered meaningful new mandates while Private Wealth gained momentum. Management buyout ensures aligned leadership for continued organic growth focus. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
InflationInflation remains persistently elevated above central bank targets, driven by three critical forces: Middle East conflict energy shocks, AI boom supply-side stress (chipflation), and trade policy uncertainty. The manager expects inflation to linger over the 12-18 month horizon with risks skewed to the upside despite the recent oil price decline. Second-round effects from higher energy costs have yet to be fully felt across broad categories. |
Inflation Energy Trade Policy AI Rates |
AIThe AI buildout has provided a meaningful tailwind for consumers (wealth effect) and businesses (capex boom), with the U.S. economy running at an above-trend pace partly due to AI investment. However, cost pressures from the AI boom have leapt to the forefront, with rapidly rising memory chip costs fueling supply shortages and contributing to inflationary pressures. Late in Q2, traders reassessed the sustainability of the AI trade and related stock valuations, creating volatility in the high-flying technology and megacap space. |
AI Technology Semiconductors Valuations Capex | |
Trade PolicyTrade policy dynamics pose significant risks to the outlook, with the U.S. set to impose new tariffs under Section 301 in the second half (replacing expired Section 122 levies). USMCA negotiations are dragging on with little clarity on policy direction and the long-run tariff regime, prompting a prolonged period of trade policy uncertainty. This uncertainty weighs on business sentiment and may dampen global economic activity. |
Trade Policy Tariffs USMCA Uncertainty | |
Private CreditNon-traditional sources of income such as private credit provide a relatively stable return profile, lower volatility, and diversification benefits with low correlations to traditional asset classes. The manager maintains an overweight allocation to diversified credit at 15.5% versus a 12% benchmark. Private credit is positioned as instrumental in constructing a resilient portfolio given the challenging environment for traditional 60/40 portfolios. |
Private Credit Diversification Income Volatility | |
Private EquityPrivate equity has demonstrated an ability to generate equity-like returns with less volatility and outperform public equities even in market downturns. The manager maintains a modest overweight at 16.5% versus a 15% benchmark. Private equity is highlighted as providing differentiated sensitivities to the economic cycle and diversification benefits in the strategic asset allocation. |
Private Equity Returns Volatility Diversification | |
OilOil posted its biggest quarterly decline since the pandemic as flows through the Strait of Hormuz accelerated following progress on a U.S.-Iran peace deal. However, the manager notes that resumption of energy trade will be gradual, concerns remain about restoring production capacity and repairing damaged infrastructure, and risks related to oil prices remain skewed to the upside. The fragile U.S.-Iran détente could see setbacks and re-escalation. |
Oil Energy Geopolitical Supply | |
ChinaA widening divergence is emerging in the Chinese economy as domestic demand softens while industrial production accelerates on the back of resilient exports and strong external demand for AI/electronics. The supply side remains robust amid an AI-driven export boom, but the demand side has faltered as household spending sags under the weight of a housing crisis and fragile jobs market. This underscores a widening two-speed economy and supports the case for both monetary and fiscal support. |
China Exports AI Housing Demand | |
| 2026 Q1 |
OilOil prices soared 76.6% in Q1 due to Middle East conflict disrupting the Strait of Hormuz and choking off global supplies. Even with a swift resolution, physical damage to energy infrastructure and supply chains will keep prices elevated well above pre-conflict levels. The energy shock poses stagflationary risks with higher inflation and slower growth. |
Energy Crisis Supply Disruption Geopolitical Risk Stagflation Strait of Hormuz |
InflationCore inflation remains well above Federal Reserve targets, with tariff-related pressures yet to fully filter through and oil price spikes reducing scope for disinflation. Central banks face a dilemma between tackling inflation and supporting growth. The stagflationary environment suggests persistently higher inflation across scenarios. |
Central Banks Monetary Policy Tariffs Energy Prices Policy Dilemma | |
Private CreditNon-traditional income sources like private credit provide relatively stable returns, lower volatility and diversification benefits uncorrelated to public markets. In a challenging environment for traditional 60/40 portfolios, private credit offers attractive risk-adjusted returns across economic scenarios with expected returns of 5-7%. |
Alternative Assets Diversification Stable Returns Portfolio Allocation Risk Management | |
Trade PolicySweeping tariffs across trading partners threaten to hobble global growth and push up prices for consumers and businesses. The effective tariff rate in the US remains at its highest level in nearly a century. Uncertainty around USMCA review and unresolved US-China deliberations continue to dampen business sentiment and activity. |
Tariffs Global Trade USMCA Business Sentiment Economic Growth | |
| 2025 Q4 |
InfrastructureFiera Capital enhanced capabilities in infrastructure as a segment where they have deep expertise and privileged access to opportunities. This represents part of their strategic focus to concentrate capital and talent where competitive advantage is strongest. |
Infrastructure Private Markets Capabilities |
Private CreditThe firm enhanced capabilities in private credit alongside infrastructure, positioning in segments where they have deep expertise and privileged access to opportunities. This aligns with their strategy to focus where competitive advantage is strongest. |
Private Credit Alternative Investments Expertise | |
| 2024 Q4 |
Private CreditPrivate Credit division reached $4.8 billion AUM with growth driven by new allocations. The firm manages eight distinct flagship credit strategies focused on targeted mid-market opportunities across real estate, infrastructure and corporate sectors globally. |
Private Credit Mid-market Real Estate Debt Infrastructure Debt Corporate Debt |
InfrastructureInfrastructure AUM reached $4.2 billion with focus on global mid-market opportunities. The firm prioritizes sustainable and essential assets while minimizing carbon-related investments through active management to optimize performance. |
Infrastructure Mid-market Sustainable Assets Active Management | |
AgricultureGlobal Agriculture strategy builds diversified portfolios of farmland assets primarily in the U.S., Australia, New Zealand and Canada. Growth was driven by new allocations with focus on high-quality farmland partnering with top-tier local operators. |
Agriculture Farmland Row Crops Animal Protein Permanent Crops |
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