John Wilson of Sprott Asset Management is part of this year's Wealth Professional Canada's Host List.

Sprott Asset Management

One of the more notable investment stories of 2017 has been the acquisition of Sprott Asset Management by the firm’s CEO, John Wilson, and president, James Fox. According to Wilson, the $46 million deal is expected to reach regulatory approval by late in the second quarter of 2017 or early in the third, and will see the yet-to-be-named entity assuming control over Sprott’s mutual fund business. Sticking to what it knows best, the parent company, Sprott Inc., will retain the metals, natural resources and real assets side of the business, which accounts for $7.5 billion in assets under management.

The split has been conducted amicably, and the new company led by Wilson and Fox will retain strong ties with their former employer. “Sprott has a large passive business based on precious metals, so that is staying with them,” Wilson says. “The gold investment team is staying with Sprott, but they will sub-advise on our precious-metals-related mutual funds.”

Having joined the company in 2012, Wilson arrived with a goal to make the Sprott name about much more than just precious metals. He has been pretty successful in that respect: Sprott Asset Management has developed a reputation as one of Canada’s top fund managers in the alternative space. That success ultimately created a division between Wilson’s team and the top brass regarding the future direction of Sprott, leading the two sides to go their separate ways.

“We have grown and diversified our business over time, but when you are part of a parent organization whose primary focus is precious metals, there are only so many things the whole organization can accomplish at once,” Wilson says. “A lot of times we lost out on some of the strategies we wanted to do to precious metals strategies they wanted to do.”

Some of those strategies will now resurface in the months to come when the deal is finalized, and that will likely mean a new entrant into Canada’s ETF market. “We are happy to stay on the active side, but that doesn’t mean some of our active strategies can’t be rolled into an ETF,” Wilson says. “It’s a different way to buy a strategy; frankly, we don’t mind either way. There are some technical and regulatory issues to get around – when you are doing alternative funds with things like options involved, it becomes a little more complicated.”