Well-known manager joins Sprott as firm launches new fund

By Mark Brown | January 3, 2006 | Last updated on January 3, 2006
3 min read

Peter Hodson has left CI Investments for the second time in little more than a year, this time moving to Sprott Asset Management.

The highly-regarded investment manager will join Sprott as an investment strategist, meaning for the interim he will be part of the investment management team, but not managing a specific fund. As a brokerage offering funds, Sprott needs IDA approval before it can name Hodson as a fund manager.

Hodson first left CI in December 2004 to join Waterfall Investments, a Toronto-based hedge fund company. That departure did not sever ties between CI and Hodson, as CI retained Waterfall as a sub-advisor to several Canadian small-cap portfolios.

At the time Peter Anderson, president and CEO of CI heralded Hodson as being “an asset to CI since he began managing funds for us, delivering excellent results to his Canadian small-cap portfolios.” Hodson returned to CI last September as vice-president of portfolio management for CI and lead manager of the $64 million CI Signature Canadian Small Cap Class Fund and the $211 million CI Explorer Fund.

CI investments appointed Epoch Investment Partners and QVGD Investors to manage a number of the company’s small cap portfolios following Hodson’s departure.

At the same time as Hodson’s arrival at Sprott, the investment firm announced the launch of the Sprott Growth Fund. The timing of launch of this fund is no accident. “It’s probably not a coincidence that I think ultimately when we have approval that he will have a major hand in that,” says CEO Eric Sprott of Hodson.

The fund, which is expected to launch sometime later this month, will take a bottom-up approach and invest primarily in equity and equity-related securities of North American companies. The minimum investment will be $5,000 and it is expected to be eligible for registered tax plans.

As announced in mid-December the Sprott Canadian Equity Fund is now re-opened. At the time of the initial announcement Eric Sprott, CEO of the investment firm, said the decision was based on “extensive research and uncovering of new and exciting investment opportunities for the fund.”

Eric Sprott picked up on that theme again in an interview on Tuesday. “We have many ideas that we could participate in that are beginning to flourish a little, whether it is the precious metals or the energy side,” he said. “Our cash resources are at a level where we feel pretty comfortable so we wouldn’t mind adding to the total capital in the fund so we can buy more ideas.”

Despite the high metal prices and soaring energy costs, Sprott is confident there are sill buying opportunities out there. “We do see lots of opportunities, particularly in those two areas where we have concentrated the fund — in precious metals and energy.”

The firm reserves the right to re-cap the fund in the future should the growth rate of net subscriptions exceed the pace of valued investment opportunities during what it believes to be a difficult and long-term secular bear market.

Sprott last re-opened subscriptions to this fund a year ago, but only for a short two months. According to Morningstar, this five-star fund has returned 28.8% over the past five years.

Three unit series are available, including series A units, which will be available to all investors, series I, which will be available to qualified and approved institutional investors and series F units, which will be available to investors who participate in fee-based programs through their dealer and whose dealer has signed a series F agreement with Sprott.

Filed by Mark Brown, Advisor.ca, mark.brown@advisor.rogers.com


Mark Brown