Eric SprottJim Ross
Eric Sprott is stepping down as chief executive officer of the money-management business he founded, a move the famous investor expects will give him more time to spend running the firm's funds.
To take over as CEO, Sprott Inc. has hired Peter Grosskopf. He's a veteran of two decades in the securities industry who until taking this job was president of Cormark Securities Inc., one of the most profitable and successful boutique brokerages in Canada.
Mr. Sprott, who is 65, said the company that bears his name needed to work on its succession plan. More than that, though, he said Sprott has expansion ideas that Mr. Grosskopf will champion. They include making the Sprott brand more global, and in Canada, where Sprott is already well known, selling more products.
The Sprott name has become synonymous in Canada with investments based on a belief in the rising value of gold and oil, and Mr. Sprott says there's a lot of room to build as that becomes a more popular viewpoint around the world.
"It's a franchise we can use a lot -- the world is coming to our way of thinking," he said, adding that one of his beliefs is that gold will one day be the world's currency. "I wouldn't mind being the world's expert in the world's currency."
Mr. Sprott, the company's controlling shareholder, will remain chief investment officer of the Sprott fund unit and take on the role of chairman.
The new CEO, Mr. Grosskopf, 45, said his goal is to make Sprott "global and broader, with more share of wallet in Canada."
Investors in Sprott Inc. shares will be hoping that Mr. Grosskopf can translate that into better performance on the earnings statement and in the stock market, where the company has been a weak performer since its 2008 initial public offering. The stock, sold to investors at $10 a share, slid over the next few months and has languished since. It closed Tuesday at $3.30.
The IPO came after a hot period for Sprott when many of its resource investments were big winners, driving big performance fees and drawing investors.
Since 2008, in volatile markets, the firm has struggled to maintain the pace. Growth in assets stalled, and many of its hedge funds are a long way from their highs, which means that the firm is bringing in far less in performance fees.
Mr. Grosskopf comes to Sprott after six years at Cormark, which was consistently said by rivals in the securities business to be extremely profitable, although as a private company it released no results.
Mr. Sprott actually founded what's now known as Cormark, creating the firm in 1981 as Sprott Securities. As he became more focused on running money, he spun off Sprott's asset management business in 2000, and two years later sold Sprott Securities to its employees. They renamed it Cormark.
Mr. Sprott said he had no plans to give up managing funds for his company.
"I enjoy every day," he said. "There's no plans to have a specific person take over."
"Some day I guess I'll give it up but I am not sure that's in the next five years."
Kevin Bambrough, Sprott Inc.'s president, said he can't see Mr. Sprott ever retiring fully from the money management side of the business.
"He's one of those guys: It's just what he does. He lives and breathes it."