Sprott All Cap Fund launching as 'now is the time for opportunity'

It might not seem like a good time to launch a fund, but when Sprott Asset Management’s Charles Oliver saw what was happening in the markets this summer, he asked his boss, Eric Sprott, if they could get the ball rolling with their already-delayed fund.

The Sprott All Cap Fund officially launches on Thursday, but Mr. Oliver and co-manager Jamie Horvat, who both came over from AGF, detailed their plans in a presentation on Monday. And they stressed that now may be as good a time as ever to run with the fund.

“I can’t think of a better time to be buying out there,” Mr. Horvat said, noting that the indiscriminate selling had made it a very scary time.

“The market is a mess,” Mr. Oliver added. “You want to play a good defense, but now is the time for opportunity.”

He said the fund will likely avoid financials for some time given that the crisis is expected to continue, adding that they may even consider establishing small short positions in some Canadian names. Mr. Oliver highlighted the fact that concerns remain about how much exposure they have to their U.S. counterparts. “It’s very hard to get a grasp of what their exposure is,” he said.

One place to hide could be gold, which Mr. Oliver continues to think will hit US$2000 per ounce in the next four years. “Having a little gold underneath the mattress certainly makes some sense,” he said.

And since the world really doesn’t have a good handle on who will win and who will lose, he insists that 2008 will definitely prove to be a rough year. “Governments don’t go bankrupt, but the U.S. is certainly in a mess,” the manager said.

The Sprott All Cap Fund will typically hold more than 100 securities, it is expected to be fully invested, and has the ability to be up to 20% short. It will have a blend of small and mid-cap names in an attempt to exploit the inefficiencies of the “undercovered small cap market.”