The various Sprott companies recently touched the $10-billion milestone for asset management -- a huge surge, and the chief executive of Sprott Inc. says there's much more to come.
"Look for more growth," said Sprott Inc. CEO Peter Grosskopf, speaking shortly after the firm released its earnings Thursday morning.
Sprott is looking to expand in both the U.S. and Canada, both through adding new products and perhaps with some acquisitions.
"We're looking at both large and small merger and acquisition opportunities," he said. "It only takes a small number of those to happen and we're going to grow quite significantly."
Areas to watch include the U.S.-managed account business and Sprott Consulting, where the firm handles its private-equity opportunities. That business is looking at deals in everything from silver to farmland, he said.
On the product side, the company has recently moved into fixed income, and now has about $500-million in fixed-income assets, and is getting requests from clients for access to more asset classes.
The one clients ask for most is a monthly income style fund, Mr. Grosskopf said. He said Sprott may look to do something in that area but he is wary because the sector has been hot so assets are pricey, and he doesn't want to chase performance. "You don't want to get your income but lose your capital," he said.
Mr. Grosskopf said that Sprott's funds have weathered the past few days well, given their focus on precious metals.
"The last bit has ben great -- but that's a relative word. It's still very difficult to make money in this market. But it's been good for us."
Leading up to the worst of the mess in markets, results in some funds were held back by the underperformance of gold shares relative to bullion, but "we really made it up in the last few days," said Mr. Grosskopf. The gap was just so big between bullion and gold shares that it had to close, he said. "Risk was coming out of the market and people were taking chips off the table, and gold shares were part of that, but I think that people now said 'Hey, that doesn't make any sense.'"
Mr. Grosskopf said there's no near-term end in sight for the outperformance of precious metals, something that the European sovereign debt situation has driven home at Sprott.
"We continue to stay with it and press it," he said of Sprott's focus on precious metals and resources. He said the theme remains front and center "until there are answers to some of the really tough questions" that the world's economies are dealing with -- such as what to do with all the debt, and until gold is much higher: "$5000, $6000, $7000, then maybe we rotate. It seems like it's going to be a long, long cycle."