Also in discussion HERE
What is interesting about both of these mandates is that they represent new capital to the sector.Natural resource investing that participates in financing the juniors has typically originated from small hedge funds or open-ended mutual funds, but these are often generalist, short term investors relative to the natural resources cycle.
Our new partners are long-term investors with the intention to stay in the natural resources business.[…]These new type of investors are more focused and long-term participants with financial and strategic objectives, with the design of providing the raw materials for the development of their respective countries.
That these private equity pools of capital are choosing to deploy capital in the natural resource sector now is an “extremely bullish” sign for the sector, says Rick, though Sprott is unlikely to rush into the sector in order to deploy this capital immediately.
There may also be more of these types of investors to come, says Rick: “From talking to sovereign investors in my network, it appears big money is circling the physical sector as well. The money has not yet ‘landed,’ but it is important to know what might happen to those markets if the ‘big money’ begins to settle. We believe it would not take much demand for physical delivery on the futures exchanges to create a very unsettling experience for the large institutions that are short the trade.”