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Eric Sprott, outgoing CEO of Sprott Inc.

Eric Sprott is on the hunt for someone to replace him on his hedge funds now that a successor has been named for his corporate role as chief executive officer at Sprott Inc.

The high-profile, bearish hedgie said Wednesday in a conference call that it is a more difficult to find a replacement compared with his mutual funds, but hopes to have someone in place in a few years.

"The hedge funds are little more complex because it takes a different frame of reference to manage a hedge fund," said the 65-year-old Mr. Sprott, who runs Sprott Hedge L.P. among others.

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"We are experimenting with various partners here [Sprott]both in research and the portfolio management area. But ultimately we may have to go out and find someone…We have to think that we'll do something within five years."

The task has become more difficult after former star hedge fund manager Jean-François Tardif left Sprott a year ago. He has not resurfaced yet to manage money elsewhere.

But Mr. Sprott sees no problem finding a successor for his Sprott Canadian Equity Fund. "We have been having some of the other [Sprott] fund managers actively involved in assisting us in the Canadian equity fund," he said. "We could change that and not skip a beat."

The first part of Mr. Sprott's succession plans took place came Tuesday when the firm announced that Peter Grosskopf, who was more recently president of Cormark Securities Inc., will take over as CEO at Sprott in early September. He worked in the corporate finance department at Cormark when it was previously named Sprott Securities, another company founded by Mr. Sprott. "We know Peter very, very well," Mr. Sprott said. See Globe story.

Mr. Grosskopf has a big-picture vision for Sprott. "I think that this franchise could easily double within the next five years," he said. "The ability to address a more global market that has not been tapped in the past is definitely there…This is an industry where there is lots of consolidation opportunities and we have to take a good look at what role we want to play."

Investors, who bought Sprott at it initial public offering price of $10 a share in the spring of 2008 and are still hanging onto the beleaguered stock, hope he is right.

UPDATE: GMP Securities analyst Stephen Boland upgraded his rating on Sprott Inc. on Wednesday to a "buy" based on share depreciation, but maintains is one-year target of $4.50 a share. "We continue to believe any performance fees from the mutual funds in 2010 will be modest and any fund-based performance fees will be from hedge fuhds," he wrote.

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