The company declined to make Mr. Sprott, 69 years old, available for comment.
The firm's focus will remain precious metals, but it aims to better manage its risk, Mr. Grosskopf said.
Sprott's
mutual-fund, private-equity and wealth-management arms now collectively
manage about $7 billion, down from $10 billion last fall. The vast
majority of that decline was from redemptions and position markdowns in
the funds and physical-gold trusts.
Many
precious-metal bulls have been hurt this year as low inflation and
rising financial markets reduced demand for havens. Few have been as
concentrated in gold as Mr. Sprott or touted it with such zeal.
In
interviews and other commentaries, Mr. Sprott, who is somewhat active
in libertarian causes, has said that he believes government statistics
understate demand from emerging markets and obfuscate true levels of
supply.
Mr. Grosskopf said the firm's
investors were fully aware of Mr. Sprott's thinking. "We have always
been transparent about what we're doing and what we expect the results
to be," Mr. Grosskopf said. "Everybody knew what the risks were."
The
HFRX Macro: Commodity-Metals Index, which tracks hedge-fund managers
with at least 50% exposure to metals, is down 28% so far this year.
Mr.
Sprott's losses exceed that and other precious-metals benchmarks,
thanks in part to heavy exposure to volatile mining stocks and short
exposure to international equities that have climbed this year, investor
documents indicate.
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