Good morning. My name is Ernest, and I'll be your conference operator today. At this time, I would like to welcome everyone to Fiera Capital's earnings call to discuss financial results for the fourth quarter and 2021 fiscal year. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question and answer period. As a reminder, this conference call is being recorded. If you'd like to ask a question during this time, simply press star one on your telephone keypad. If you'd like to withdraw your question, please press the star two key. Thank you. I will now turn over the conference to Ms. Marie-France Guay, Senior Vice President, Treasury and Investor Relations. Ms. Guay, you may begin your conference.
[Non-English content]. Good morning everyone. [Non-English content] . Welcome to the Fiera Capital conference call to discuss our financial results for the fourth quarter and 2021 fiscal year. Before we begin, I invite you to download a copy of today's presentation, which can be found in the investor relations section of our website at ir.fieracapital.com. Note that today's call will be held in English. Also note that comments made on today's call, including replies to certain questions, may deal with forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ from expectations. I would ask you to take a moment to read the forward-looking statements on page two of the presentation. Turning to page three, our speakers today are Mr. Jean-Philippe Lemay, Global President and Chief Executive Officer, and Mr. Lucas Pontillo, Executive Vice President and Global Chief Financial Officer.
On slide four, I will provide the agenda for today's call. We will begin by a discussion on AUM and flows, followed by an update on distribution and investment performance. We will then review our financial performance. Following our prepared remarks, we will take your questions. With that, I will now turn the call over to Jean-Philippe.
Thank you, Marie-France. Good morning, everyone, and thank you for joining us. I'm on slide five. Assets under management reached CAD 188.3 billion as of December 31st, increasing by CAD 7.5 billion during the fourth quarter and CAD 6.4 billion over the year. Excluding the impact of strategic dispositions made this year-end AUM would have been up CAD 17.6 billion or 10.3% compared to December 31, 2020. Our enhanced efforts and focus on distribution activities has generated significant gross sales for the year 2021. Fundraising results at 19.4% in our private markets platform and 3.9% in our public markets platform, contributing significantly to future organic revenue growth across geographies and channels.
I'm pleased to report that our investment performance across our platforms remained strong throughout the year, exhibiting resiliency and consistency of style and generated outstanding performance for some key high conviction strategies. This backdrop translated into enhanced financial performance for both Q4 2021 and the full year 2021, as we achieved strong adjusted EBITDA, adjusted EBITDA margin, and adjusted EPS, primarily as a result of performance fees generated in Q4. We generated adjusted EBITDA of CAD 92.1 million in Q4 2021, corresponding to a margin of 38.1%. Adjusted EBITDA for the year was CAD 24.7 million, driving our 12-month margins to 33%. We generated adjusted EPS of CAD 0.66 during the fourth quarter, translating into CAD 1.78 for the full year of 2021.
We are very pleased with these results, which demonstrate the progress we are making on our strategic direction. I am now moving on to slide six. The CAD 7.5 billion increase in our AUM in Q4 was mainly driven by favorable markets, as well as most of our investment strategies generating above benchmark investment returns. Furthermore, we won CAD 1.9 billion of new mandates. These increases were partly offset by negative net contributions from clients of CAD 1.6 billion and CAD 2 billion in lost mandates. A significant portion of these outflows were tied to market conditions, which I will address later on.
For 2021, AUM increased by CAD 6.4 billion or 3.5%, and this despite the unfavorable CAD 10.2 billion AUM impact from the strategic sale of Bel Air and the rights to manage the Fiera Capital Emerging Markets Fund, which were partly offset by the acquisition of a second global equity team, Atlas. Excluding the impact of strategic dispositions, opening AUM would have been CAD 170.7 billion, and the corresponding 12-month increase would have been CAD 17.6 billion or 10.2%.
The increase for the year, similar to the fourth quarter, was primarily driven by market appreciation and strong alpha generated by our investment teams, as well as new mandates won across all our distribution channels. On slide seven, I will provide additional color on our 2021 flows by distribution channels and investment platforms. AUM by distribution channel when adjusting beginning-of-period AUM for our 2021 divestitures increased in each channel and across geographies. In institutional, we ended the year with CAD 95.6 billion in AUM. We grew assets by CAD 6.2 billion or 7% during the year, with market and alpha generation contributing significantly. While organic AUM growth was roughly neutral during the first nine months of the year, Q4 was affected by CAD 1.6 billion of lost institutional mandates in global equity strategies.
In financial intermediaries, excluding disposition, AUM would have increased CAD 9.6 billion or 14.2% to reach CAD 77.9 billion as of December 31st, 2021. The increase was primarily driven by market performance, the addition of CAD 0.9 billion of AUM related to Atlas and organic growth of CAD 300 million. In private wealth, when adjusting for the sale of Bel Air, end-of-period AUM of CAD 14.8 billion represents an increase of CAD 1.7 billion or 12.6% during the year as a result of favorable market impact and organic growth. With regards to our investment platforms, in private markets we grew AUM by CAD 2.5 billion or 18.7% during the year, capping the year with close to CAD 16 billion in assets.
The increase was mainly driven by organic growth, with the platform raising CAD 2.6 billion in new subscriptions during the year, and this across all the private markets categories that we offer, real estate, private debt, infrastructure, agriculture, and private equity. Our public markets investment platform increased by CAD 3.9 billion or 2.2% over the course of 2021, driven by market appreciation as well as our team's ability to generate alpha across both fixed income and equity investment strategies. When excluding dispositions, the corresponding AUM increase year-over-year would be CAD 15.1 billion or 9.6%, driven by positive market impact and the onboarding of the Atlas team.
On slide eight, we've illustrated what the organic AUM flows for the quarter and the year translate into in terms of projected annualized base management fees for the business. As you can see, it's not all about AUM. It's about where the flows are generated and invested. Notwithstanding unfavorable flows of CAD 1.3 billion in 2021, we still expect to generate an incremental CAD 7.4 million of base management fees from these net flows over the next year as a result of continued enhancements to our distribution organization. The impact our asset class mix has on revenues is even more apparent when comparing our investment platforms. The CAD 1.7 billion of positive organic growth in private markets is more than compensating for the outflows in public markets.
What's more, not only do private markets investment strategies yield higher margin on base management fees, they also generate transaction and commitment fees from committed undeployed capital, as well as performance fees following as deployed matures successfully. Moving on to slide 9 for a review of our distribution channels, starting with institutional. Gross sales were strong in 2021 for Canada, and this across both our public and private markets investment platforms. This was partly offset by rebalancings due to significant market and relative performance. Overall, the Canadian institutional channel delivered significant net organic revenue growth for 2021, a reflection of the power of our diversified business model. In the U.S., our improved distribution model is setting the stage for faster enterprise-wide growth. Rebalancings in equity as a result of significant market and relative performance were experienced in this region as well.
In Europe and Asia, we are experiencing positive trends across both public and private markets investment strategies and are pleased with the progress being made. Organic net flows were negative during the fourth quarter, mainly as a result of lost global equity mandates I highlighted earlier. Notwithstanding, we had a solid quarter with strong client support for the StonePine sub-advisory agreement. Notably, one client almost doubled their investment during the fourth quarter, adding close to CAD 400 million to their existing position of CAD 600 million following the announcement, and in January, adding another CAD 400 million. Our U.K. pension plan client increased the exposure to StonePine sub-advised global equity as well.
Also, in Europe, we had a new first with two European insurance clients investing in our infrastructure equity fund, and we are optimistic that this will open doors to the insurance market in that region. We've had great traction in distribution channel over the last two years, as evidenced by the consistent quarterly growth of our base management fees across both public and private markets investment strategies. Quarterly base management fees have increased by a cumulative rate of 37% over the last two years and reached CAD 85 million in Q4.
Turning to financial intermediaries on page 10. In Canada, we had strong results in this channel across both public and private markets, an indication of the progress made in evolving our investor interaction model. In the U.S., we realized sales of public equity capabilities while continuing to expand our sales team in the self-advisory space and in Eurasia, we are seeing momentum and interest for the Atlas team strategy and continue to grow the emerging and frontier markets franchise. Furthermore, we have been successful with our private markets offering, notably with infrastructure and real estate sales to some of Europe's leading investors. We generated positive organic growth during the fourth quarter and also for the year.
Quarterly base management fees in this channel continued to trend upward. We generated CAD 55.3 million in fees in Q4 2021, an CAD 11.4 million increase or 26% increase compared to Q1 of 2020. In private wealth, slide 11, we won new advisory mandates in Canada, leveraging our diversified investment platform as well as our strategic and tactical asset allocation capabilities, generating significant net organic revenue growth.
Today, allocations to private markets investment strategies in this distribution channel exceeds CAD 2 billion in AUM, which is contributing materially to revenue generation. In the U.S., we won CAD 600 million of gross new mandates and fixed income during the year. Although net organic growth was slightly negative this quarter, CAD 600 million of organic growth was achieved for the year, and we expect these flows to contribute positively to base management fees directly as a result of the growing allocation to private markets in this channel. Moving on to slide 12. Compared to September 30th AUM of CAD 15 billion, private markets AUM on December 31st of 15.9 was CAD 0.9 billion higher or 6%. We raised CAD 1 billion in new subscriptions in Q4 and deployed CAD 0.9 billion into new portfolio investments.
Over the 12-month period ended December 31st, 2021, these metrics are even more impressive. We raised CAD 2.6 billion in new subscriptions, deployed CAD 2.9 billion into assets globally, and ended the year with CAD 1.6 billion of committed capital still to be deployed. Our ability to deploy almost CAD 3 billion of capital in one year into high-quality assets across multiple geographies speaks to the expertise of our teams. In just three years, we have nearly doubled the size of this investment platform. The CAD 7.7 billion increase from CAD 8.2 billion in December 2018 represents growth of 94% or a CAGR of almost 25% for the period. Revenues have increased even more significantly.
Whereas in 2018 we generated CAD 70 million in revenues from our private markets business, in 2021 we realized CAD 175.2 million of revenues, a CAD 105 million or 150% increase from three years ago. This is not only a reflection of the growth of the asset base but also of the scaling of diversified revenue streams that come with it, transaction, commitment, and performance fees. Consequently, the three-year CAGR on private markets revenues is close to 36%. Not only does this investment platform enable us to achieve better investment outcomes for our clients, it diversifies and grows our revenue streams.
What's more, by commanding higher average fees than asset management industry average, our private markets platform will also act as a revenue and margin growth accelerator in the years to come as we continue to expand our platform globally, supported by our talented teams. Turning to slide 13 for a review of investment performance of select private market strategies where performance remains strong across all key strategies during the fourth quarter and deal activity remained high. The Canadian and the U.K. real estate strategies continued to deliver robust performance in Q4 2021. The portfolios span the full risk-return spectrum and continue to be well-positioned to capture the strengthening market tailwinds heading into 2022. The portfolios are also seeing positive contributions from the retail and office sectors as stability returns to these markets.
Furthermore, real estate is experiencing exceptional performance as a result of low interest rates and investor demand shifting towards assets that provide protection against inflation. Notably, the Fiera Real Estate Small Cap Industrial Fund generated a 7.7% return during the fourth quarter and 15.1% since inception. Lastly, in real estate, we ranked within IPE's top 150 real estate investment managers for the second year running. On the private debt side, most of our strategies generated robust returns for the quarter.
While Q4 was marked by continued inflationary challenges, this was countered by a still low interest rate environment, sustained consumer demand, and a renewed commitment from both the private and public sectors to aid borrowers navigate the uncertainty of the pandemic. Our private debt strategies are well positioned for a rising interest environment as they are mainly invested in short-term and floating rate loans, and we remain focused on building a portfolio of private debt instruments with defensive characteristics where downside protection has been the leading investment criterion. In infrastructure, I'm extremely pleased to share that Alina Osorio, President of Fiera Infrastructure, has been named Outstanding Individual of the Year Americas by the IJInvestor Awards 2021. She has been honored for exceptional performance overseeing our infrastructure platform's impressive growth in the mid-market space.
Since joining forces with Fiera Capital to form Fiera Infrastructure in 2016, her leadership and expertise have contributed to the asset class's tenfold growth, with assets under management increasing from CAD 225 million to CAD 3.4 billion. It comes as no surprise that Fiera Infrastructure was shortlisted for Global Mid-Market Manager of the Year, an Infrastructure Investor Awards nomination that recognizes our landmark year of fundraising and capital deployment across new and existing platforms. The team continued to be active on the investment front during the fourth quarter, with three acquisitions announced, and the EagleCrest Infrastructure strategy continues to perform well, having generated IRR since inception of 8.9%.
Consistent with its strong performance during the first nine months of the year, our global agriculture strategy capped the year with sustained performance through Q4, driven by solid performance from our Australian row cropping assets. In December, the fund closed on its eighth platform, a Spanish tree food company that represents a new geographic exposure for the portfolio and adds a new commodity to the fund's mix. 2021 was a banner year for our global private equity fund. The portfolio grew from five investments to 12 and to over 100 underlying companies, diversified across sectors and geographies following encouraging fundraising results, predominantly in the intermediary channel. The fund generated a 1-year absolute return of 24.54% and has generated a 22.2% return since inception.
We are very pleased with our robust investment performance and dedication to responsible investing exhibited by our teams over the course of the quarter and the year. Turning now to public markets on slide 14. While we track our investment performance on a quarterly and even monthly basis, our longer-term performance is critical to us because this is what matters to our clients. Our consistency and ability to deliver above benchmark returns through active investment management is noteworthy across our fixed income and equity assets. In fixed income, when looking at our three-year and five-year ability to deliver alpha, respectively 96% and 92% of AUM beat their benchmarks. These results are just as impressive for equities. When looking at investment performance over three years, 95% of Fiera's equity AUM has generated added value. Over five years, that number is even higher at 98%.
Through various economic cycles and economic shocks, our teams, our investment professionals remain fully dedicated and 100% focused on the task at hand, efficiently allocating capital on behalf of our clients prudently and profitably. On slide 15, I will review investment performance for select public market strategies, most of which generated alpha during the fourth quarter, as well as on a one-year and three-year basis. The Atlas team generated 62 basis points of added return in Q4 and 13.9% since inception, and is just a few weeks shy of reaching its five-year historical track record milestone. The team has made steady progress in a short period of time, and we are confident it will continue to benefit from significant organic growth over the course of 2022 and beyond.
At present, the main client base of the asset strategy are financial intermediaries, which can serve as a catalyst to penetrate the institutional and private wealth markets. This was notably the case in the fourth quarter as two U.K. wealth managers started funding mandates totaling more than $250 million. The StonePine Global Equity Strategy realized an impressive 3.13% of added value in Q4 and over 5% on a one and three-year horizon. I'm also pleased to share that just a few weeks ago, the sub-advisory partnership with StonePine was formally established. We look forward to continuing to build on the solid, mutually beneficial relationship that we have established with the team over the past 12 years.
Our U.S. Mid Cap Growth strategy generated an absolute return of 6.78% during the fourth quarter, beating its benchmark by an almost equivalent amount. On a one-year basis, the strategy has generated an absolute return of 18%, adding a remarkable 13% over benchmark, standing comfortably in the first quartile of its peer universe. Finally, in the U.K., two funds generated exceptional investment performance in 2021. The Emerging and Frontier Opportunities Fund realized an absolute return of 43.8%. The Frontier Markets Fund generated a 42.6% return during the year, adding value of 22.9% relative to its benchmark. These results significantly contributed to the outsized performance fees delivered by the public markets investment platform in Q4, with these two funds alone generating over $33 million in performance fees.
I will now turn it over to Lucas for a review of our financial performance.
Thank you, Jean-Philippe, and good morning, everyone. I'm on slide 16. I'm pleased to report that total revenues of CAD 241.9 million for Q4 2021 increased by CAD 67.4 million or 39% when compared to the prior quarter, driven mainly by higher performance fees, which are traditionally higher in Q4. When compared to Q4 of last year, total revenues increased by CAD 73.3 million or 43.5%, mainly driven by exceptional performance fees that were 2.6x greater than in Q4 2020, as just highlighted by Jean-Philippe. We have adjusted the graphs presented on the next three slides to exclude contributions from previously announced dispositions, mainly Bel Air, Wilkinson Global Asset Management, Fiera Investments, and the revenue sharing arrangement with CNR in order to facilitate period-over-period comparison.
For all of 2021, total revenues excluding dispositions of CAD 731.1 million grew by CAD 152.5 million when compared to 2020 adjusted total revenues. Looking at this by investment platform and turning to slide 17, total revenues for private markets during the fourth quarter of 2021 were CAD 66.5 million, an increase of CAD 34.3 million compared to Q4 of last year or 106.5%. Base management fees of CAD 34.3 million in Q4 2021 increased CAD 10.3 million or 42.9% year- over- year, driven primarily by favorable asset class mix and market appreciation across real estate, infrastructure, private debt within the institutional and private wealth distribution channels.
The platform generated CAD 13.1 million in performance fees this quarter, a CAD 10.4 million increase compared to last year, driven mostly by our real estate platform in the U.K.. Similarly, the same platform also drove share of earnings and joint ventures to CAD 8.3 million in Q4 2021, a CAD 6.7 million increase compared to prior year, which stems from the timing of realizations of underlying joint venture projects. Finally, other revenues increased CAD 6.8 million year-over-year, reaching CAD 10.8 million in Q4 2021, driven primarily by transaction and commitment fees. This type of revenue is unique to private markets and does not apply to our public markets investment platform.
These fees represent revenues earned between the time that the capital is committed to a strategy and the time at which it is deployed and begins to generate base management fees. As we continue to grow our private markets platform, these fees become increasingly recurring in nature. Total private market revenues for 2021 were CAD 175.2 million compared to CAD 125 million in 2020, a CAD 49.9 million increase or 40%. Turning to slide 18 for review of public market revenues. Total revenues in public markets reached CAD 175.4 million during the fourth quarter, a CAD 39 million increase or 28.6% compared to Q4 2020.
Performance fees accounted for most of this increase, rising from CAD 20 million last year to CAD 46 million in Q4 2021. The majority of the CAD 26 million increase is in connection with the emerging market and frontier markets equity and liquid alternative investment strategies in the U.K., which all had a terrific year. Base management fees of CAD 128.3 million in Q4 2021 increased CAD 13.5 million year-over-year or 9.9%, driven primarily by higher average AUM in large cap equity investment strategies within the institutional and financial intermediary channels, were partly offset by a decrease in U.S. fixed income strategies driven by unfavorable market returns and slight net outflows in the U.S. private wealth space. Other revenues decreased by CAD 400,000, mainly from foreign exchange losses on forward contracts.
Excluding dispositions, total public markets revenues would have been CAD 555.9 million for the year, compared to CAD 453.2 million in 2020, a CAD 102.7 million increase or 22%. We are very pleased with our revenue results for the quarter and the year. They speak to the strong demand and investment performance of our competitive suite of investment strategies. Turning to slide 19. Excluding share-based compensation, SG&A was CAD 149.8 million for Q4, compared to CAD 134.9 million in Q4 2020, an increase of CAD 14.9 million or 11%. Whereas total revenues increased by CAD 46 million or 23.5% over the same period.
The increase in SG&A was primarily driven by higher revenue related expenses associated with performance fees in the U.K., which were partially offset by lower variable compensation expense as a result of dispositions. Excluding the impact of dispositions for Q4 2020, SG&A less share-based compensation would have increased 26% year-over-year compared to 43% increase in total revenues over the same period. Share-based compensation expense in Q4 of 2021 was CAD 11.9 million, an increase of CAD 6.6 million when compared to share-based compensation of CAD 5.3 million in Q4 of last year. The increase was mainly driven by accelerated vesting of CAD 5.3 million, as previously mentioned.
Turning to slide 20, we recorded net earnings attributable to company shareholders of CAD 35.7 million or CAD 0.34 per share during the fourth quarter of 2021, compared to a loss of CAD 1 million in Q4 of last year. Adjusted net earnings during the current quarter was a solid CAD 68.5 million compared to CAD 49.2 million a year-ago period, an increase of 39.2%. The difference between net earnings and adjusted net earnings is explained largely by amortization and depreciation expense of CAD 13.5 million, CAD 11.9 million of share-based compensation expense for the quarter, of which again CAD 5.3 million is related to accelerated vesting, and CAD 6.5 million in restructuring acquisition and other costs, mainly because of severance and restructuring activities. I am now on slide 21.
We generated strong adjusted EBITDA of CAD 92.1 million in the current quarter compared to CAD 61 million in Q4 of last year, an increase of over CAD 31 million or 51%. With regards to the adjusted EBITDA margin, we are very pleased with the 38.1% margin realized in Q4 of this year, which reflects strong performance fees earned during the quarter. While we are happy about these results, which reflect the strong performance of our teams, we want to highlight the exceptional performance that the U.K. investment team delivered in 2021. This quarter's results also contribute to driving the full year 2021 adjusted EBITDA to CAD 247.7 million, an increase of CAD 38 million compared to 2020 or 18.1%.
Accordingly, the corresponding full year margin for the year is 33%, a solid 2.8% increase higher than 2020. Now on slide 22. Our financial leverage ratios show continued improvement once again this quarter. Having lowered net debt by CAD 62.2 million over the course of the fourth quarter, we improved on all associated leverage metrics accordingly. Net debt, which includes our convertible and hybrid instruments and excludes cash, now sits at CAD 501.1 million as of December 31st, which is down CAD 127.9 million or 20.3% over the last five quarters. Likewise, our funded debt as calculated for our credit facility stood at CAD 424.1 million at the end of the year, a decrease of CAD 81.4 million compared to five quarters ago.
Our funded debt to EBITDA ratio was 2.04 times as of December 31st, 2021, down 22% over the course of the year and at its lowest level in more than six years. This is the fourth consecutive quarter where this ratio has remained below the 2.5 mark and consequently well below the covenant of 3.5 x. At 2.04 x, this is even lower than it was prior to completing six acquisitions over the course of 2018 and 2019 and despite setbacks from the pandemic in early 2021. Furthermore, our interest coverage is also strong at above 7 x on our covenant of limit of 3.5 x.
Visibly, the consistency with which we have been reducing our debt levels and simultaneously improving our operating results demonstrates our focus on efficiently allocating capital and managing our balance sheet. On to slide 23. In addition to reducing our financial leverage, delivering value to shareholders through optimized capital allocation remains an ongoing priority for Fiera Capital. Following the renewal of our NCIB in August of this year, we purchased and canceled over 1 million Class A shares during the last five months of the year for total consideration of CAD 10.7 million. For all of 2021, when including shares were purchased under the original renewed NCIB, we bought back over 1.6 million shares for CAD 17.9 million.
Note that in early 2022, we also purchased an additional 3.6 million shares for cancellation in connection with the Natixis transaction, thereby committing to returning value to shareholders. Moving on to our dividend, our shareholders continue to benefit from a high dividend yield. As of the market close on December 31st, Fiera's shares yielding a dividend of 8.1% compared very favorably to the yield on the S&P/TSX Canadian Dividend Aristocrats Index of 3.9%. Accordingly, we paid out CAD 87.7 million to shareholders in the form of dividends during the year. Between the NCIB and the dividend, this brings total value paid to shareholders to CAD 105.6 million in 2021.
On that note, I'm pleased to announce that the board has approved a dividend of CAD 0.215 payable in April 2022. Our dividend reinvestment plan remains in place. This program is entirely for the benefit of shareholders, offering them a convenient way to reinvest cash dividends into Class A shares. Given the NCIB also in place, we're currently buying shares on the market to satisfy the DRIP and are not issuing them from treasury. On to slide 24. Adjusted EPS has grown steadily over the course of the last two years. Adjusted EPS of CAD 1.78 in 2021 was CAD 0.38 higher or 27% when compared to 2020.
What's more, although Fiera Capital shares offer a strong dividend yield, the ratio of dividends paid per share to adjusted EPS has fallen from 60% last year to 47% in 2021 or said differently, adjusted EPS is over 2 x our dividend amount. Note that our adjusted earnings per share has grown at a compounded annual growth rate of 8% over the course of the last five years, while the corresponding CAGR for dividends paid is 3.8%, which further reaffirms the sustained improvement in our financial strength over the past few years. I'll now turn the call back to Jean-Philippe for closing remarks.
Thank you, Lucas. Turning to slide 25. We are very pleased with this quarter's and this year's results, which reflect the execution of our strategic priorities over the last few years, streamlining and scaling our operations, expanding our offering of private markets investment strategies, and improving our distribution capabilities, all the while remaining unwavering in our commitment to investment excellence. Going forward, we aim to continue to allocate capital efficiently by harnessing the intellectual capital of our diverse and inclusive team to continue constructing optimized portfolios to deliver on client objectives and delivering on the specific risk-return outcomes sought by our clients, to offer innovative investment strategies, design strategies as building blocks that are complementary to one another, and to contribute to socially responsible outcomes. Lastly, we remain committed to delivering value for our shareholders.
We will also continue to evolve our distribution capabilities and ensure that we are viewed by our clients as a top solutions provider, both globally and across asset classes, underpinned by leading-edge research, innovation, and client centricity. For institutional investors, we want to continue to be a global counselor to meet their long-term investment objectives. In the financial intermediary channel, we want to keep being the partner of choice for alpha-generating solutions that contribute to long-term sustainable prosperity. Finally, in the private wealth space, we will continue to offer institutional-grade investment advice and capabilities to our high-net-worth clients. We believe that in doing the above, we will be able to drive the necessary organic revenue growth that will allow us to generate long-term value for our shareholders. This concludes our prepared remarks. I will now turn the call back to the operator.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your question will be pulled in the order they're received. Should you wish to decline from the polling process, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Nik Priebe with CIBC Capital Markets. Please go ahead.
Hi. Good morning. Wanted to start with a question on performance fees in the quarter, particularly strong in Q4 relative to the past couple of years. You gave a bit of a good breakdown there on how the private and public strategies contributed. Can you give us a little bit more color on how the performance fee structure looks across the strategies that were larger contributors in Q4? Like, would it be based on absolute or relative returns? I'm just thinking about how to frame our expectations for performance fees in 2022 and beyond.
Sure. Maybe I can give you some color, Nik. The main contributor of performance fees this quarter was related to our long-only frontier market strategy and long-short frontier market opportunities fund managed out of London. In terms of AUM, it's about 2/3, 1/3 in terms of exposure from the long only and the long short. I mean, on the long side, the performance fee structure is directly a percentage sharing of the value added above the benchmark. On the long short, is really a performance sharing above zero benchmark. Just to directly add value straight from a zero base. That's the breakdown for this quarter and this year in that strategy.
Overall, I would say that the long only exposure that we have on performance fees is typically structured that way, albeit very limited in terms of AUM across our public market strategies. In our liquid alternatives, it's really typically either a benchmark of zero or a short-term interest rate benchmark on which we apply a performance fee sharing.
Understood. Okay, that's helpful. I know that performance fees are typically crystallized on December 31st. I'm just wondering, because of the outsized performance fees this year, when would they typically be collected in cash? Like, would that be reflected on the balance sheet subsequent to December 31st?
Correct. That would be in the first quarter.
Okay. Okay, very good. Then just last question for me. I was wondering if I could ask you to talk a little bit more about the Fiera Atlas team. You know, the press release suggested that investment performance numbers look really exceptional. Just wondering if you could talk a little bit about, you know, the RFI, RFP activity there, you know, how you plan to scale that strategy. Does it become capacity constrained at some level of AUM? You know, what type of margins you'd expect? Just any additional color on that would be helpful.
Sure. We're doing this rollout in a very organized and step-by-step approach from a distribution rollout standpoint. Our low-hanging fruits are in the market. They have been more present in the short term in the past, I mean. Europe and Australia are two key markets where we are focusing our efforts. I would say in the intermediary channel is the low-hanging fruit in those regions. Also leveraging our partnership of distribution in Australia with Ironbark. On the other end, we have also hired a specialized distribution resources capability specialist in the U.S., where we're gonna go and roll out the strategy through the consulting network and also institutional clients directly in the U.S.
Same strategy for Canada with the dedicated resources of capability specialist for the strategy as well in North America. In terms of our plan in our go-to-markets with that particular strategy, it's well thought through and now already on execution. In terms of latest flows, I mean, we've seen positive activity already at the beginning of the year with traction the strategy as well. In terms of your question around capacity, the team is now running close to CAD 1.5 billion. Well, there is a specific target, which is probably around CAD 20 billion or that level, you know, in a very long-term perspective.
We don't see any particular capacity issues over the next quarters. It would be a good problem to have if we hit that number in a very short order.
Understood. Okay. That's helpful. That's all I had. I'll requeue. Thank you.
Thank you.
Thank you. Your next question comes from Geoff Kwan with RBC Capital Markets. Please go ahead.
Hi. Good morning. You know, I appreciate that your comments around the revenue pickup from the inflows would more than offset the fee loss from the outflows. You also had referenced client rebalancing, but just wondering what your bigger picture thoughts as to why the net sales performance has been, you know, maybe, I guess, inconsistent over the past year or so, and when do you see maybe being able to deliver a more consistent net sales on a quarterly basis?
Thank you, Geoff. I think the main story in 2021 with respect to net organic revenue, or let's say the negative side of the revenue organic revenue impact for the year is really driven by the market returns over the year. Equity markets have been very strong, and on top of that, we've delivered a positive value add. When you add that and you have a strong institutional presence, you will typically see rebalancings. When I look at the different components of it, the net contribution aspect of our equity platform is by a large amount dependent and explained by that context.
A bit counterintuitive, but you would typically see a negative correlation between the strongest of the markets and alpha and the net contributions. We've seen a few mandate losses in Q4 in global equity. In fact, out of the many clients we have, for StonePine sub-advised strategy, there's only one client that, following the announcement, decided to reallocate money. That's a very good outcome from our perspective in terms of navigating the change. For the rest, it was very positive. I think these are the two main factors.
In terms of your question about our outlook for delivering net organic revenue growth, this is a key target and a key metric that all our organization is focused on. We strongly believe that we have all the pillars in our platform to be able to deliver that. We're finalizing and being ready to be fully operational as well in our other regions from a distribution organization standpoint. We have a strong perspective and outlook on our ability to deliver positive number on that front.
Maybe just for color, if I look at the Canadian performance in 2021, on the revenue or net organic revenue growth perspective, it was materially positive both on the net and the growth side if I look at only the Canadian region. That's also in relation to the fact that our distribution organization and the evolution of that organization has been mature for 2021 full year. We expect as we continue to roll out and mature and have our organizations on the distribution side as strongly organized as we have in Canada in the coming months and quarter, it will drive positive results there.
Okay. I was wondering if there's any and I get there's maybe indirect, but any sort of direct AUM exposures, whether or not, you know, private market investments that you have, securities owned or anything else like that might be impacted by the situation in Ukraine and Russia.
A good question, Geoff . In terms of direct exposure to Russia, we have one strategy which is a specialized strategy that is an Eastern European strategy, where about 40%-45% of our portfolio is invested in diversified positions in Russia. It's about CAD 150 million of AUM. This is the only strategy with a benchmark long only that we have, a material exposure in the country. We don't expect this part of our business to be under pressure.
If ever we would see outflows in that strategy because it's an intermediary mandate, the amplitude or the amount is relatively small in the overall scheme of our organization. More specifically, direct exposure to Ukraine, we don't have across all our portfolios. More broadly, obviously, you know, the macro context will obviously be impacted by the current situation. Fears of exacerbation of inflation through energy prices and potential pressure as well on the overall guidance of the macro and policy rate direction might have an impact more holistically.
We feel that our platform in general, given our exposure to private market assets and style exposure as well, overall, we feel that the indirect exposure is well under control.
Okay. Just my last question was, given the high degree of performance fee you had in the quarter, is there a, like a, you know, specific compensation ratio or, I mean, ballpark, because the compensation might change. With respect to the performance fee, such that allow us to kind of, say, back out, and measure the adjusted EBITDA excluding performance fees.
I would say.
Maybe Lucas, you can give. Yeah. Okay, go ahead, Lucas.
Yeah, I would say for just combined for the quarter on an average basis, it's about 60% that's falling to the bottom line.
Okay. So 40% comp ratio. I mean, I appreciate it may not necessarily be the same quarter- to- quarter, but okay.
And, and it's [audio distortion].
[audio distortion].
Not necessarily strategy to strategy. That's just a blend rate for all of these.
Would you think, like, depending on the mix and obviously it can come from different areas, but you know, would 40% be a reasonable estimate to try and at least you know, try and back into what the adjusted EBITDA margin would be ex performance fees?
Yeah. I'd say depending on if it's reasonable, but there is a range. I mean, the range will go anywhere from 40-60, so depending.
Okay.
Directionally, Geoff, the more the performance fees will come from private markets, it will increase the amount that flows through the bottom line. The more it's driven by public, it will be maybe lower than the average.
Got it. Thank you.
Thank you. Your next question comes from Gary Ho with Desjardins. Please go ahead.
Thanks, good morning. Maybe just to follow on Geoff's question on the net flows there. You mentioned kind of one client really out of the StonePine arrangement. Can you comment on why and are there others contemplating this, to your knowledge? Maybe comment on kind of near-term pipeline that's building in the first half of this year.
Without giving specific details, Gary, on the specific client that left, it's really an idiosyncratic situation. I think that given the amount of relationship that we have, it's really an outlier. In terms of the ongoing relationship, I mean, it's going very well. There's a strong support on the client side. You know, there might be down the road in a few quarters some additional movements. We don't expect this to be material in the short term. With respect to guidance on flows and/or pipeline, I mean, year to date, our flows are positive year to date without giving specific numbers.
Like I mentioned, following Geoff's question, our organization is truly focused and dedicated to retention and growth across our regions and channels. That's really, we're expecting to be able to perform on that front.
Any comments on kind of where AUM kind of stands today just given the volatile markets that we've seen so far?
Yeah. Obviously, we've experienced a bit of a setback in AUM. It's around, I don't know if I can give color, but it's around 4% overall AUM for the month of January.
4% decline for the month. Okay.
Yeah. Yeah. Yeah.
Great. My next question, Lucas, you know, you separate out the revenue by public markets and private markets, so thanks for presenting that. Is there by any chance that you can do the same exercise down to EBITDA? And if so, how would that look like? I think it's pretty intriguing that your private alt segment represents, you know, less than 10% of your AUM, but, you know, 23% of your top-line revenue. Just wondering if you've done that exercise, and/or any color that you can provide.
Yeah. Unfortunately not. I mean, at the end of the day, it is one business unit and one business segment, which is asset management. We obviously track the AUM and revenue contributions. Consistent with our global operating model that we've been putting in place over the last two years. There's a fair bit of, you know, centralized and shared services that we're putting in place to effectively increase efficiencies. You know, unfortunately, that's not gonna be something we'll be able to disclose going forward.
Okay. While I have you, Lucas, just on the share-based comp adjustment that came through, that will come through in 2022. I think on the last call you told us to check back in with you just given the year-end numbers, where that shakes out. Are you able to share kind of how we should think about that, looking out? I think you mentioned kind of CAD 5 million, CAD 7 million. Like how should we adjust for that, EBITDA adjustment for 2022?
At this point, I think the comment I would make is if you look at sort of what's been accelerated over the last two quarters, you're looking at about a CAD 12 million acceleration. Those plans now, by virtue of the fact that we've concluded the transaction relative to those plans in January, there will be sort of an additional amount coming through in the first half of 2022. You know, at this point, that historical run rate is actually a pretty good mirror of what to expect going forward. Again, just putting it into context, that acceleration is sort of the average of, you know, three years' worth of plans. Now you're gonna come into a period where we effectively have to accelerate one remaining new plan.
Just by virtue of, you know, where the AUM and the performance of the fund is, I think those last two quarters are actually a pretty good indication of what to expect in Q1 and Q2 of next year.
Sorry, that CAD 12 million, that's CAD 6 million per quarter, is how I should think about it, as opposed to CAD 12 million representing a full year?
Correct. It's gonna depend on timing of a few things, but you should expect it over the next two quarters as well. There, again, there might be some imbalance between one quarter and the next, but in aggregate, the overall amount is a good indication.
How long does that last, Lucas?
That'll be the last one. This will be the last one to wrap up, the entire program. You should.
I know, but does that last for one year? The CAD 6 million per quarter will last for a year.
No. It'll be over the first two quarters, and then that'll be the end of it.
Got it. Okay. That's helpful. Those are my questions. Thank you.
Thank you. Your next question comes from Graham Ryding with TD Securities. Please go ahead.
Hi, good morning.
Hi.
First of all, lots of new additions to your disclosure. That's appreciated, so thank you for the increased visibility. My question is really just on the fund performance, particularly on the public fixed income and equity side. It's quite impressive relative to your benchmarks. Would you be able to give us some sort of figure or color on, like, what that aggregate quartile ranking would look like for your public AUM? Does that equate to sort of top one, top two quartile rankings on aggregate?
Yes. Thank you, Graham. For the overall equities in general, when you look at it from a three-four year perspective on the equity side, large cap, most of it is first quartile. When you go into the fixed income strategies, I would say it's above median over that same timeframe, three-four years. It's between first and second quartile across the different independent active strategies. Yeah, the percentage is quite high from a benchmark-beating standpoint, but the peer comparison is also over the long term pretty strong.
Okay. Understood. Lucas, just for you, like, it looks like you've got a pretty strong cash balance here. Are there any sort of puts and takes to think about in Q1 when you sort of pay out performance fees or sort of compensation-related performances to think about? Just broadly, you know, what are you thinking with capital allocation here? Are you investing for growth, paying down further debt or considering buybacks? Like, how should we think about your options?
Yeah. Thanks for that. I think sort of the most material amount, which is already public and out there, was the additional share buyback that we did in January as part of the Natixis transaction. Again, you can appreciate that for you know the almost 3.6 million shares that we bought back there, it was a fair bit of capital redeployment. I think that's probably the most material thing to focus on for Q1 in terms of how that cash was reallocated.
Okay. Understood. My last question, just, you know, you've delivered now a pretty strong 33% EBITDA margin for 2021. Clearly, you know, performance fees were a factor there. Would you be able to give us a target of what you think you could achieve in 2022? Is this a repeatable number or is this outsized because of such a strong performance fees this quarter?
I mean, I think it is fair to say it's outsized because of the strong performance fees this quarter. You know, that being said, we are committed to improving operating leverage and moving forward. We are watching the first quarter cautiously. You know, it's been a rough start to the year market-wise, so we'll see what kind of impact that has. Also just want to highlight that traditionally, Q1 is a lower margin quarter for us, by virtue of the fact that a lot of the expense benefits go through in the first quarter. Just things to keep in mind as we head into Q1, both the backdrop of the volatility in the markets as well as, I say already it's a quarter where we traditionally have higher headwinds on the margin.
Okay, great. That's it for me. Thank you.
Thank you. Your next question comes from Jaeme Gloyn with National Bank. Please go ahead.
Yeah, thanks. Just a couple of clarification questions to start. First, on the performance compensation, I heard the 40% number. I just wanted to clarify that was strictly for Q4, that you were disclosing that number, as it relates to the amount that's tied to performance comp.
Correct.
Okay, great. As I think about the share count this quarter, a pretty significant dilution in this quarter, and we've seen it kind of bounce around a little bit. How should we be thinking about share dilution, share dilutive effects going forward?
Yeah, we were diluted by just over 1 million shares in the quarter year-ended. Again, keeping in mind the buyback that we did early on in Q1, 2022, which took that share count down by, as I say, almost another 3.6 million. Already into the first quarter, we are accretive in that regard relative to that buyback. There'll be a few issuances as well made during the quarter in terms of share-based compensation. Right now the expectation is that by the end of the quarter that share count will actually be down from what it was at year-end.
Yeah. Sorry, I was thinking about the effect of dilutive share-based awards, contingent consideration, convertible debt. You know, that going from basic to diluted, weighted average shares outstanding is a pretty big step up.
Part of that is what happens, Jaeme, when we've been in. Part of that's just accounting convention. In quarters where we've had an accounting loss, the instruments actually don't make it into the dilution count because if you've got a negative EPS, the dilution then only serves to actually lower the EPS amount. Or actually increases the EPS amount in that regard. By virtue of the fact, you know, those instruments get excluded. Now because of the fact that we're in such positive earnings territory, you're seeing a lot more of those instruments effectively come into the calculation. Particularly the hybrid got included in the dilution calculation this quarter, but the convertible debt did not. There's really been no change. There hasn't been any change or material change in the underlying.
It's just the convention in the accounting for it.
Right. Understood. This would be a more representative level of dilution effects as opposed to some of the other quarters we saw in 2021.
If you were to assume that those instruments were to be settled in shares.
Right.
Right.
Fair enough. Okay, sorry, I did have one more clarification question. It was just on the share-based comp from Gary's question. So I understand there's still another 6 million shares that would be tied to the StonePine. That's something that's gonna hit in Q1 or Q2, but the base run rate is, you know, still around that 5 or 6 million in share-based compensation per quarter. Did I understand that correctly?
Yeah, that's.
Okay.
As I say, we're still running those fitting the calculations, but it's a fair range.
Yeah. Got it. Okay, last one, and I apologize if I missed this, just on the earnings from JV and associates. Obviously a big step up, but you know, how should we be thinking about that number, you know, maybe not on a quarterly basis, but on an annual basis in 2022? Is it, you know, as funds are coming in and committed, or is it, you know, is it like a mark-to-market type thing going on in the U.K. real estate? How should we think about that revenue line item on an annual basis perhaps, as we move forward in 2022 and then even 2023?
Maybe, Lucas, maybe I can give maybe just a comment structurally here, for you, Jaeme. maybe, Lucas, you can comment on expected amplitude. When we are speaking about the share of JV in terms of revenue item, it's really related to minority ownership we have in real estate development platforms in the U.K., where the revenues that are following through this revenue line item are really related to crystallization of profits that the development platforms are actually executing on. It's really transaction dependent, speed of going through the development projects and so on. It's not really related directly, I would say.
There's a link, but it's not directly related to the dynamic of our private markets business in the sense of committed, undeployed, and deploying into our private funds. Just wanted to clarify that distinction here.
Yeah. To add to that, you know, I have made the comment in the past that it unfortunately is a lumpy line item for us. You know, while there is a pipeline of projects in what they deem sort of opportunistic development, you know, the development in that pipeline could be as long as two years between the time a project comes online and the time it gets released. As I say, we have some visibility in terms of when projects come on. A little harder to gauge, though, when they'll come due.
Right. Fair enough. Okay. Thanks very much.
Thank you.
Thank you. There are no further questions at this time. Ms. Guay, I turn the call back over to you.
Thank you, operator. That concludes today's call. Thank you for joining us. [Non-English content].
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.