The Phaserl


Sprott Asset Management diversifying away from gold and resources

by Chris Powell, GATA:

Dear Friend of GATA and Gold:

Sprott Asset Management Inc., the Canadian investment firm best known for precious metals, doesn’t want to be known solely for precious metals anymore.

The protracted bear market for commodities has forced the fund to diversify its investments and shift focus away from the resource sector, where it profited so substantially during the bull market of the 2000s.

Company chief executive John Wilson, who was brought on in 2012 to help lead the shift, says more than 80 percent of the company’s actively managed business is not related to resources at all today, compared with only about a quarter in 2012.

In an interview, Mr. Wilson said that Sprott actually started as a small-cap investment firm and saw big gains on non-resource plays such as Taser International Inc., but the commodity bull market pushed the firm more into resources.
“The firm grew incredibly quickly through there and grew this reputation as a resource manager, but at its core that’s not necessarily what it was about. It’s just that’s what worked, and that’s what people wanted to put money in.”

But the resource reputation has stuck, helped in part by founder Eric Sprott’s affinity for gold, and Mr. Wilson said that the company determined from a recent survey that 70 percent of Canadian fund managers still think of Sprott as focused only on gold and resources.

And so Sprott Asset Management, the biggest component of the Sprott Inc. public company, is now in the middle of a cross-Canada tour and advertising campaign to change the perception that it’s only about resources as the bear market for commodities continues for a fourth year.

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