John Wilson talks to WP about the management buyout that led to the creation of Ninepoint partners
Although the management-led buyout of Sprott’s diversified asset business came as a shock to some industry insiders, for John Wilson it was a move that made perfect sense. Wilson is the former CEO of Sprott Asset Management LP and along with James Fox led the buyout.
A new company, SPR & Co LP, was created shortly after the takeover to assume portfolio management for the business, but then last week, almost two months after the buyout; SPR & Co LP was re-named Ninepoint Partners.
“Prior to the buyout, we were part of a large public company, which had a lot of different elements to it,” says Wilson, who is now Managing Partner of Ninepoint Partners, along with Fox. “A big part of the company was resource oriented, in particular precious metals; that was always the legacy of the company. As we grew the asset management side of the business, that started to create some issues around messaging to the marketplace.”
Despite the name change and rebrand, the way the fund business is operated won’t really change. Wilson and Fox were already running the asset management business successfully, but both felt launching a new brand would improve market clarity.
“Too many people thought that because we were Sprott we should be working with gold,” Wilson says. “The buyout has made things simpler for us and better for Sprott. We still have gold and precious metals funds managed by Sprott; it makes good sense.”
Ninepoint plans to launch a number of new funds over the next 6 – 9 months. They’ve already launched the Sprott Canadian Senior Debt Fund for the institutional market place, will be sub-advised by Waygar Capital. The fund will focus one-third of its business on lending to the defense sector, another third will come from restructuring and turnaround, and the rest from traditional asset-based lending.
“We’re excited to partner with the team at Waygar Capital,” says Wilson. “We believe there is significant opportunity to provide financing to the heavily underserved Canadian defense and security sector as well as a growing number of Canadian companies experiencing restructuring and turnarounds.”
The Ninepoint name is derived from the “nine point puzzle,” where four, continuous straight lines are used to connect all nine points of a 3x3 grid. The only way to solve the puzzle is to draw “outside the box.”
“The idea is consistent with the attributes that we’re about,” Wilson says. “We are not going to be offering a Canadian dividend income fund; there are already 500 of them. Our role in the industry is to create innovative investment solutions that diversify peoples’ risk or return streams away from where the bulk of the industry sits. That’s what advisors come to us for and that’s where we’ve had a lot of success.”
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