TheGlobeAndMail.com
North America is the midst of a “systemic financial meltdown,” Eric Sprott warned yesterday as his company turned a quarterly profit of more than $11-million. “I’m not trying to be shocking to anyone, but let’s face it,” said Mr. Sprott, chief executive officer of Sprott Inc. “When Bear Stearns goes down, Freddie and Fannie go down, and IndyMac goes broke, we have major issues out there.” Toronto-based Sprott runs mutual, hedge and offshore funds. Mr. Sprott said assets under management increased to $7.7-billion in the second quarter, up from $6.8-billion at the end of March, despite operating in what he called a bear market.
Profit was $11.4-million, or 8 cents a share, compared to a year-earlier loss of $7.7-million. Revenue - management fees, crystallized performance fees, gains or losses from proprietary investments, interest and other income - was $39.5-million. While the company charges performance fees, they are not calculated until the end of the year and are distributed as a special dividend. The firm, which went public in April with a $200-million offering on the Toronto Stock Exchange, will load its funds with gold and energy stocks in the months ahead while selling the financial industry short. “We’re trying to position our funds to survive the difficulties,” he said. “We’ve gone into gold on the long side because it will survive as a replacement to fiat currency and into energy stocks because of our belief in the peak oil thesis.”
Sphere: Related Content