Matt Lee

Matt Lee inquired about the drivers of performance fees and carried interest, and the factors influencing market value changes in the private strategy segment.

Answer

Kevin Hibbert, CFO of Sprott Inc., clarified that performance fees and carried interest are episodic, stemming from managed equities and a legacy exploration LP, with a significant portion from the legacy LP not expected to recur. Whitney George, CEO of Sprott Inc., explained that the private strategy segment's market value, primarily composed of private credit funds, reflects a balance between new capital deployment and loan repayments in a strong market. Kevin Hibbert added that these loans are accounted for at amortized cost, so market value increases are mainly from equity kicker enhancements, offset by loan repayments.

Matt Lee asked about the drivers of performance fees and carried interest, inquiring if a similar benefit should be expected in 2026 or if it's a more episodic occurrence. He also questioned why the market value of the private strategy portfolio only increased by $5 million despite a strong macro environment, seeking to understand what drives value beyond net inflows.

Answer

Kevin Hibbert, CFO of Sprott Inc., clarified that performance fees and carried interest are episodic, with a significant portion in the past year coming from managed equities and a legacy exploration LP that is not expected to recur. He explained that future performance depends on market conditions for active equities and harvesting timelines for private strategies. Whitney George, CEO of Sprott Inc., explained that the private strategies are primarily private credit funds, where value is a function of loans being repaid in a strong market, balancing new deployments against repayments. Kevin Hibbert added that these loans use amortized cost accounting, so market value increases are mainly from equity kicker enhancements, offset by loan repayments.