ReportonBusiness.com – Money managers around this country will have enjoyed a moment of catty glee yesterday when Sprott Inc. shares traded down slightly off its initial public offering.
Investment types are even more envious than the rest of us when it comes to money, so you can rest assured that every one of them was bitterly aware of the amazing pay days Eric Sprott and his team enjoy. Sprott paid almost $300-million out in discretionary bonuses from 2005 to 2007, chump change by New York or London hedge fund standards, but in Canada? Please.
Mr. Sprott and his team earned the money. They don’t get paid unless their investors make money (or lose less than some benchmark, as is the case with some of the hedge funds) and their investors have, in the main, done very well over that period and since the launch of the first Sprott fund more than a decade ago.
Do the shares sound like a good investment? Rather than trying to answer that question in its own right, investors might consider comparing an investment in a Sprott fund to an investment in the stock. Don’t buy the mutual fund, buy the mutual fund company, is a saying you’ll hear from time to time. It might not apply in this case.
