There should be big checks all around at Sprott Inc., the big hedge fund manager. Managers will get bonuses and investors are in line for a substantial special dividend after the company raked in almost $200-million in performance fees.
Sprott said that gross performance fees in fiscal 2010 are estimated at about $196-million. Of course, a chunk of that will go to pay bonuses, expenses and taxes, but after that the company's board "will resolve to have the company pay out, by way of special dividend to its shareholders, a substantial portion of performance fees."
It marks a nice turnaround for Sprott, which earlier this year said that many of its funds were still struggling back to their high water marks -- the levels they had to reach before the firm could collect performance fees -- and it should reflect a better year for the hedge fund industry in general as managers start to pull in performance fees again after a tough slog back from the lows of the financial crisis. Another firm that could post nice performance fees is Gluskin + Sheff , as The Globe's Shirley Won wrote not long ago.
The final numbers for 2010 aren't out yet, but as of November, the Scotia Capital Canadian Hedge Fund Performance Index had risen 9.4 per cent on an asset-weighted basis. A glance at the chart shows that the index surpassed its previous high early in the year and has been striking into new territory since, bringing performance fees with it.
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