Sprott Asset Management's hiring of two high-profile money managers from AGF has rekindled talk that the firm is preparing for an initial public offering.
The new managers, Charles Oliver and Jamie Horvat, will bring above-average returns and below-average ages to Sprott, where founder Eric Sprott and precious metals specialist John Embry are both in their 60s.
Sprott has long been viewed as a potential IPO candidate as Mr. Sprott and other partners look for a way to garner some liquidity. (Though over the years, Mr. Sprott has proved through a generous commitment to philanthropy that he's not short of cash on hand.)
"There's times when you have to find a window of opportunity, or find a way to diversify the shareholders of the company," Mr. Sprott said in an interview Monday." We haven't made any decisions on that front, but it's something we're always keeping our eye on."
The problem is, markets haven't exactly been co-operative. Not only is it a fallow period for IPOs because of the turmoil in stock prices, the upheaval has hit some of Sprott's key calls.
Mr. Sprott, a notorious bear, has been proven right in two of his main bets as gold has soared and financial stocks have slumped thanks to writedowns resulting from one of Mr. Sprott's main bugbears - derivatives.
Unfortunately, the results haven't helped all of Sprott's investments. The firm's heavy weighting in small-cap mining stocks has been a minus in the credit crunch as many of the stocks have suffered from sudden risk-aversion on the part of investors, and from a bout of selling by hedge funds that have had to reduce their exposure amid margin calls.
Nonetheless, Sprott is still growing on the strength of its long-term track record. Assets have now topped $6-billion, up about 25 per cent in less than a year.