Question · Q4 2025
Bart Jerszynski asked about the assumed run rate for the net compensation ratio and for more detail on the 'AUM and liquidity begets AUM and liquidity' concept, particularly regarding institutional allocation.
Answer
Kevin Hibbert, CFO of Sprott Inc., stated that while they don't provide forward-looking guidance, the net compensation ratio is driven by revenue growth with limited torque to cash compensation. He suggested flattening the current ratio and adjusting it with future net revenues. John Ciampaglia, CEO of Sprott Asset Management, explained that AUM and liquidity create a flywheel effect by meeting distributor AUM thresholds for shelf placement and increasing institutional comfort for larger positions, leading to tighter bid-ask spreads. He cited the Uranium Trust as an example of a multi-billion dollar fund attracting significant institutional ownership.
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