Peter Grosskopf, who will take over as CEO of Toronto-based Sprott Inc. in early September, has set an ambitious agenda to expand the firm’s product line and increase its focus on global business opportunities, possibly through strategic acquisitions and joint ventures.

Sprott has grown to about $5 billion in assets under management from $200 million in the past decade — and Grosskopf predicts the company could easily double in size in the next five years.

Sprott will be making more of an effort to market its products globally, Grosskopf says, building on the brand recognition it has already developed for resources investing. Until now, there has not been a dedicated sales effort or a team assigned to meeting offshore managers and larger foreign investment funds; but, he says, “It’s a good time to do that.”

Grosskopf suggests there could be opportunities to partner with local players in markets Sprott would like to enter and launch products for — such as a brokerage firm in China. Sprott is also of a size at which it could handle an acquisition in the asset-management business — and it is actively looking.

“We will continue to be a dynamic company that introduces new products on a timely and aggressive basis,” Grosskopf says. “We now have a broader management team to build the capabilities of the business. It’s no longer a one-man show.”

Grosskopf is taking over the CEO role from company founder Eric Sprott, who will assume the positions of chairman of Sprott Inc. and chief investment officer of subsidiary Sprott Asset Management LP, one of the firm’s three business units. Sprott Asset Management manages the Sprott family of mutual funds, hedge funds and discretionary managed accounts; Sprott Private Wealth LP serves high net-worth individuals; and Sprott Consulting LP provides management, administrative and consulting services to other companies.

“I suspect that he has underpromised,” says Sprott of Gross-kopf. ‘The company will be getting into new areas and growing assets on a variety of fronts.”

Sprott, 65, says that during the past 18 months, the firm has given a lot of attention to succession planning. Although Sprott has no immediate plans to leave the company, he wants to focus on what he loves best, which is “the macro outlook and micro analysis of companies.

“I’d far rather research a company than chair a board meeting,” says Sprott, who has never thought of himself as a good administrator. “I like what I’m doing, and now that I’m not CEO I may like it even better.”

Sprott says research is a “24/7 job” that never ends, and it “chews up more time than you can imagine.” That’s why he’s been busy during the past year augmenting the team and constructing a matrix of team leaders, of which Grosskopf is the crowning piece.
@page_break@“We want to bring in younger troops who can drive the company forward, who want to spend the time and energy necessary, and who are motivated to make it grow,” says Sprott. “At this point in their careers, they are desirous of the payoff, which for me is not as meaningful.”

Other recent hires include John Ciampaglia, appointed chief operating officer of Sprott Asset Management. Ciampaglia has 17 years of experience in the investment industry and was most recently a senior executive with Invesco Trimark Ltd. James Fox is the president of Sprott Asset Management; he moved up from a senior position in sales and marketing late last year.

“I’ve spent much of my career working on teams that have built businesses,” Grosskopf says. “I’m familiar with the corporate environment and its metrics, such as compensation, organization and putting complementary team members together.”

Although Sprott Inc. made its reputation as an equities shop with a special focus on resources, it will be paying more attention to introducing income-earning investments to meet the needs of retirees.

Sprott Asset Management is introducing three fixed-income products: Sprott Diversified Yield Fund and the Sprott Short-Term Bond Fund, which launch Aug. 5; and Sprott Absolute Return Income Fund, a long/short fixed-income fund that will launch Aug. 31.

The lead portfolio manager is Scott Colbourne, a high-profile fixed-income expert who was hired away from TD Asset Management Inc. earlier this year to beef up Sprott’s strength in income investing. The introduction of more income products will help the company be more balanced in its product line, Eric Sprott says, thereby making its asset base less vulnerable to stock market volatility and economic downturns.

Grosskopf says the team-building is almost complete, although the firm is still considering adding another portfolio manager with experience in shorting stocks. “Eric and I have a similar philosophy about succeeding in the financial business,” he says. “If the firm isn’t doing well for clients, it won’t do well as a firm. Finding good ideas for clients and achieving superior investment performance come before anything else.”

Reporting to Sprott is nothing new for Grosskopf. He worked for Sprott Securities in the early 1990s, and helped to run the Vancouver office between 1993 and 1995. He left to become one of the founders of Toronto-based investment banking firm Newcrest Capital Inc., later acquired by Toronto-Dominion Bank in 2000.

Grosskopf came back to his former firm after Sprott Securities was spun off into an independent company and renamed Cormark Securities Inc. He ultimately became president of the company before Eric Sprott came calling.

“Eric is a world-class inves-tor who has always been fantastic at attracting investors to his ideas, whether as a salesman or as a portfolio manager,” Grosskopf says. “I’m more detail-oriented, and my 23 years of investment banking experience have taught me how companies run and how you can add value for shareholders. My experience in underwriting has kept me close to capital markets, putting the buy side together with the sell side.”

IE