EXECUTIVES AT TORONTO-based Sprott Asset Management LP say the addition of star investment fund portfolio manager Dennis Mitchell to their roster should bring an extra spark to Sprott’s diversification strategy.
Two months ago, Mitchell left his post as chief investment officer and executive vice president at competing fund firm Sentry Investments Inc. of Toronto without explanation. He has re-emerged as senior portfolio manager and senior vice president at Sprott, where his focus will be on products tied to his areas of expertise – global equities, real estate and infrastructure.
“Someone of Dennis’ stature and with his track record and experience can only enhance the diversification and expansion happening at Sprott,” says John Wilson, Sprott’s chief executive officer and co-chief investment officer (CIO). “Dennis has a strong following across the country.”
Mitchell, a popular speaker at advisor road shows during his 10 years at Sentry, will be fulfilling similar promotional duties for Sprott in addition to managing fund portfolios. But he will not be taking up the CIO mantle he held at Sentry, as his preference and talents lean more toward managing money than personalities.
“I am passionate about money management,” Mitchell says. “That’s what gets me up every morning and that’s what I’m excited about. I never aspired to be CIO, and I now feel liberated here at Sprott. There are more challenges and more competition than ever on the global equities side, and my focus is to outperform on the investment side without the additional challenge of being CIO. Money management requires full attention. I can focus on getting high, risk-adjusted returns and sometimes stepping out and helping to raise capital.”
Mitchell’s investment style focuses on high-quality companies with strong balance sheets and internal cash flow healthy enough to pay dividends or invest in growing the business. He likes companies with assets that other firms would find difficult to duplicate, as well as management teams that “behave like owners and treat investors like partners” of the company. He runs concentrated portfolios and is unconcerned about matching a benchmark index or having exposure to all market sectors at all times. Mitchell says the lion’s share of top-quality, world-class companies is based in Europe or the U.S., which is why he casts his net globally.
“Mitchell is experienced in conservative, equity income strategies and had good success at Sentry,” says Rudy Luukko, investment funds and personal finance editor of Morningstar Canada in Toronto. “It’s an area that has not previously been a strong suit at Sprott, and it makes sense to bring in new talent if [Sprott] has aspirations to expand its product lineup. In addition, Mitchell is a well-known name in the advisor community, which doesn’t hurt competitively.”
Wilson, as CEO, has been steering Sprott along a course of diversification to reduce the company’s vulnerability to the commodities-driven resources industry that dominated the firm’s investment portfolios in the past. With $7.8 billion in assets under management (AUM), Sprott has revamped its product line by introducing more conservative equities, fixed-income, alternative strategies, real asset and balanced products, and Wilson has been adding to the team by hiring investment managers with expertise in a variety of areas.
The company has been conducting road shows recently, with the theme “We’re not who you might think we are” emphasizing the concept that although Sprott has deep experience in precious metals and resources investments, the firm also offers a broad range of other investment solutions.
Meanwhile, Eric Sprott, founder and chairman of parent company Sprott Inc., has withdrawn from day-to-day corporate and investment-management responsibilities.
Mitchell won’t elaborate on his reasons for leaving Sentry in July, except to say he is grateful for the experience and, after a decade at one company, it was time for a change. He was released from a “non-compete” contract by Sentry, enabling him to move quickly to his new role. New investment funds are under development at Sprott to take advantage of Mitchell’s expertise; they should be available early in 2016.
“My biggest challenge is going to be patience,” Mitchell says. “There’s lots of energy and I can’t wait to get started. I want to leverage my previous experience and expand on it.”
Mitchell, age 40, says he feels fortunate to be given the opportunity to bring his skills to Sprott at this point in his career, particularly with the current “renaissance of the Sprott brand.
“Many people look back and say, ‘I wish I knew then what I know now’,” he continues. “But, at this point, I feel I have been afforded the opportunity to make full use of what I know now. I learned a lot during my 10 years at Sentry. And here at Sprott, I have the opportunity to build a franchise exactly the way I want it done with the benefit of my previous experience, as well as the ability to learn from the experience of my new colleagues at Sprott.”
Mitchell says he was courted by other firms, but the opportunity at Sprott was most appealing from both a professional and a personal standpoint.
“We would have been thrilled to have Dennis at Sprott at any point during the past few years, as we’ve been diversifying and enhancing the franchise,” Wilson says. “And when he became available, we didn’t waste any time. As soon as the new products are available, he will be on board managing them. Meanwhile, there’s a lot of work that can be done even before the portfolios are introduced.”
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