Good morning, ladies and gentlemen. Thank you for staying. Welcome to Sprott Inc's 2021 and fourth quarter results conference call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for your questions. If anyone has any difficulties hearing the conference, please press star followed by the zero for operator assistance at any time. As a reminder, this conference is being recorded today, February 25, 2022. On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the Safe Harbor provision of the Canadian Provincial Securities Law. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements.
Certain material factors or assumptions are implied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for the quarter and Sprott's other filings with the Canadian and U.S. securities regulators. I will now turn the conference over to Mr. Peter Grosskopf. Please go ahead, Mr. Grosskopf.
Thank you. Good morning, everyone, and thanks for joining us today. On the call with me today is Whitney George, President of Sprott, our CFO, Kevin Hibbert, and John Ciampaglia, CEO of Sprott Asset Management. Our 2021 annual results were released this morning and are available on our website, where you can also find our financial statements and MD&A. I'll start on slide four. It was a great year for Sprott overall in 2021, despite the lackluster performance of gold and silver. Every division performed well and exceeded their objectives. This was reflected in our asset base, which continued to grow and hit new record levels of approximately $20 billion. Our financial metrics improved and grew across the board as well. Our managed equity segment did well in 2021.
Relative performance is strong over the past few years, and we believe it recently turned the corner on net sales. Sprott is well-positioned for a resurgence of investor interest in metals, now supplemented by the rapid expansion of interest in carbon transition minerals, which will become a new area of focus for the firm. To that end, in July, we acquired Uranium Participation Corp and launched the Sprott Physical Uranium Trust, which quickly established us as the leaders in physical uranium management. The growth of SPUT has been truly impressive and is now a $2 billion fund. Also, we recently expanded our lending platform with a successful $700 million close of the Sprott Private Resource Streaming and Royalty Fund. Our Canadian and U.S. brokerages also delivered meaningful contributions in 2021.
Sprott is well positioned for this current environment, and we continue to be focused on delivering outstanding performance. With that, I'll pass it over to Kevin for a look at our financial results for the quarter.
Thanks, Peter, and good morning, everyone. I'll start on slide five, which provides a summary of our AUM as at December 31, 2021. AUM this quarter was $20.4 billion, up $1.4 billion or 8% from September 30, 2021, and was up $3.1 billion or 18% from December 31, 2020. Throughout the year, we benefited from strong inflows to our physical trusts and lending strategies. Notably, we added more than $1.7 billion of AUM to our Physical Silver Trust primarily in the first half of the year and nearly $1 billion to our newly formed Physical Uranium Trust in the second half of the year. Importantly, these inflows, along with increased commitments in our lending segment, more than offset market value depreciation encountered across our fund products as gold and silver struggled to keep pace with other asset classes in the year.
Slide six provides a brief look into our three- and 12-month earnings. Despite the tough global precious metals and equities market in 2021 that Peter alluded to earlier, adjusted base EBITDA on the quarter was CAD 17.7 million, up CAD 3 million or 20% from the three months ended December 31, 2020. On a full year basis, adjusted base EBITDA hit a record CAD 64.1 million, up CAD 19.9 million or 45% from last year. This year's financial results truly demonstrate the strength and resolve of our business model, as well as our ability to provide sustained value for our shareholders through various market cycles.
Throughout the year, for example, we benefited from not just the strong inflows into our physical trust and lending products that I described a few moments ago, but also from very robust mining equity origination activity in the first half of the year in our Canadian brokerage, strong ongoing AUM development in our U.S. brokerage, and even managed to produce a higher year-over-year result in our managed equities division despite a tough year for mining equities overall. For more information on our revenues, expenses, and EBITDA, you can refer to the supplemental information section of this presentation, as well as our fourth quarter 2021 MD&A filed earlier this morning. With that said, I'll pass things over to John.
Great. Thanks, Kevin, and good morning to everybody. I'm very happy to share the fourth quarter and the full year results for the exchange listed product suite, and I think it's fair to say that we had a very strong year that built on the success that we saw in 2020. Starting off with Q4, we had CAD 646 million of net inflows, and for the full year, the inflows were CAD 3.1 billion, and that was up CAD 300 million from the prior year. It was an interesting year last year, and it was really dominated by two themes. In the first half of the year, it was really about our silver trust, and when that slowed down, the baton was passed over to our physical uranium trust.
Those two funds accounted for the vast majority of the sales last year, while the gold trust had a fairly quiet year as people were focused on risk-on assets. I can say, though, that the start of 2022 in less than two months has been very active on both the gold side and the uranium side as investors are coming back to physical gold, and the interest we're seeing in uranium has remained quite robust. Year to date, our sales are approaching CAD 400 million in the physical trust, and so we've got a good start to the year. Just for a little bit of context around the physical uranium trust, we acquired the vehicle in July of last year.
It was $630 million of AUM, 18.1 million pounds of U3O8. As of last night, we were at $2.1 billion and 46.1 million pounds of U3O8. The trust has grown enormously, and this scale effect has incented and encouraged more and more institutions to get involved in the sector, because quite frankly, there aren't many ways to get invested in the sector, given it's gone through a nine-year bear market where a lot of companies have disappeared. We remain very bullish on the uranium sector. Last year was really about the breakout in the spot market. We do believe that we had a true price inflection after many years of going sideways and down.
This year will really be about the inflection point in the term market where utilities typically buy uranium to meet long-term needs. We're starting to see utilities move. They are becoming more concerned about security of price and supply, and we've already seen a number of very large contracts in the market so far in 2022. I think Cameco's recent announcement that they've contracted 40 million pounds so far this year is a very bright signal to us relative to the 30 million they did for the entire 2021 calendar year. We continue to see institutional interest as well as retail interest in the sector, not just in the physical, but also in the uranium stocks.
I think the geopolitical risks that we're seeing this year, whether that's from Kazakhstan or Ukraine, is obviously adding to concerns about an already vulnerable supply chain and a constrained sector in terms of supply. We remain quite positive there. Just moving to the next slide, wanna share a little bit of competitive data around flows into gold and silver. I think last year, the recognition in the marketplace was very nice to see. It was very rewarding to finally see the market differentiate our products versus some of the larger competitors. I think the results speak to that very nicely. Our physical commodity funds are 100% backed by physical, and last year that was important for many investors.
We also have a physical redemption feature, which is another important feature that investors appreciate, and it really borne out in our results. If you look at the gold funds last year, as I said, it was a quiet year for gold funds, with most funds being negative for the year. The Sprott Physical Uranium Trust had just over $300 million in net flows, compared to -$10.8 billion for the SPDR Gold Trust. See, our assets tend to be more sticky because our product structure is different than these other ETFs. If you look at the silver funds, that's where we're really punched above our weight.
The sales into the Sprott Physical Silver Trust at $1.756 billion were multiples higher than any of the competitors, and you can see the largest fund in the category was actually at -$424 million for the calendar year. This is a really important distinction and allows us to compete with differentiated offerings that are unique and innovative and shareholder-friendly, and we're very glad the market's recognizing this. Just moving to the next slide. In November, we announced the acquisition of the North Shore Global Uranium Miners ETF. The ticker is URNM on New York. We are in the middle of a proxy solicitation process to get shareholders to vote for this transaction, and we're about halfway through. There is a 50% quorum, and most of these shareholder solicitations are prolonged, drawn-out affairs.
Unfortunately, a lot of shareholders do not vote proxies, but we're very committed to getting this over the line. We're about halfway there, and we've recently had to adjourn the meeting to March 23. If you are a shareholder, please encourage you to look at your proxy package and make your vote count. The assets in the fund are down from late last year to about CAD 700 million.
I would comment that the shares outstanding, I think, are at an all-time high. As the fund has come down in price, we've actually seen shareholders buying into it, so that's a very positive sign. With that, I will pass it over to Whitney.
Thank you, John, and good morning, everybody. Well, Managed Equities was resting last year while the rest of the firm was firing on all cylinders. That was not a bad thing. As Peter mentioned, it was a challenging market for precious metals, gold and silver, and even more so for the equities. Our funds held up reasonably well, remained competitive with all of their peers. Our AUM was down just slightly, I'd say flat-ish, and that comprised of very modest redemptions, some negative performance, and then some additions in the fourth quarter with new products that we added to the platform. This year looks to be, so far, a little bit more exciting.
We have some positive cash flow coming in and positive performance, which is relative to the rest of the market dramatically positive. I think maybe this year could be Managed Equities' t-time. We have the deepest bench, the most experienced team. I think I noticed yesterday in the board presentation the tenures, 375 years of experience amongst the team that we have. We have technical analysts, we have geologists, and I think we know our space as well as anybody on the planet, and look forward for better trading conditions in 2022. That's my report. Over to you, Peter.
Thanks, Whitney. Turning now to slide 11 to look at our private strategies. Our combined lending and streaming strategies AUM was $1.4 billion as of year-end, with considerable dry powder for further investments. In 2021, weaker originations by our lending funds were offset by strong flows into our private resource and streaming strategy, which raised $400 million on the year and completed a $700 million final close in Q1 2022. Those amounts are not cumulative. The streaming team has deployed $145 million to date through a number of different transactions and continues to be very busy. Looking ahead, we expect to continue to expand our lending business in 2022 through the launch of a couple of new strategies. I'll move now to slide 12 for a look at the brokerage segment.
Both the Canadian and U.S. brokerage businesses delivered strong contributions in 2021. The Canadian broker, in particular, benefited from strong origination activity in the first half of the year. The team is focused on diversifying their coverage to include energy transition and specialty minerals. Our U.S. broker continued to generate new sales of fee-based products. Their transition from an AUA to an AUM business model is almost complete, and they have become a unique and value-added channel for the introduction of new clients to the firm. Turning now to slide 13 for some final comments. We're pleased to have delivered these strong results in 2021. During the year, gold was held back by the strong equity markets, in our opinion, and the 60% increase in the 10-year treasury rate and perceptions of an increasingly hawkish Federal Reserve.
In 2022, the backdrop for precious metals has become increasingly supportive. Inflation has surged above 7%, and the Federal Reserve, in our opinion, risks losing credibility if they don't act convincingly. The record balance sheets of the Fed and over $300 trillion of global debt balances have increased systemic risks and the potential for policy errors. Recently, geopolitical risks are rising considerably, culminating in the Russian invasion of Ukraine. All of this has heightened investor demand for safe havens. In response, the gold price has convincingly broken to the upside of its recent trading range. The launch of Sprott marked a step out for Sprott into the complementary minerals sector. We have since expanded the business with the agreement to acquire URNM.
As usual, we remain active in reviewing additional add-on funds and the consolidation of niche managers in our focus areas. That concludes our remarks for today's call, and I'll turn it back to the operator for some Q&A. Operator?
Thank you. To ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Rasib Bhanji with TD Securities. Your line is open.
Good morning. If I could just start on the North Shore Global Uranium Miners ETF. In terms of timing, would you expect that to happen maybe in the middle of Q2 or is it more towards the end of Q1 acquisition?
Yeah. Hi. Well, it's impossible to know because it's completely dependent on getting the quorum, so shareholders are voting in favor of it, you know, 97% in favor of it. We just have to reach the 50% quorum. We are hopeful that over the next four to six weeks, we will be able to reach that quorum. We are actively engaging with shareholders and encouraging them to vote. That's our hope right now and plan is that over the next four to six weeks we can get there.
Okay. Makes sense. The lower AUM for that year, I guess that will be a benefit to the purchase price. Would that be fair?
We haven't released the terms of the transaction yet, and that's forthcoming. Why don't we leave that for another day. I think we're still very comfortable with where the AUM is. It's about. It's not that far off from when we announced the transaction. We feel comfortable with the transaction structure.
Okay. Understood. If I could pivot to the private strategies. The streaming and royalty funds final close, just to make sure I understood this right. The CAD 700 million final close, is that on top of the CAD 400 million that the funds raised this year?
No, that's all. As I mentioned, not cumulative. It's the final close which occurred during this year.
Okay. I guess in Q1 2022 then, should we expect inflows of roughly $300 million from the private funds?
Yeah. I'll let Kevin confirm that because I'm not sure of the exact timing. Kevin?
It's all gonna depend on when the capital is ultimately called into the funds. You close on these deals, you get your institutional clients in, and then the next goal is to have term sheets signed by the borrowers or the entities that will eventually borrow or use streaming or royalty economics to fund themselves. It's really gonna be at the point that they actually utilize it that you'll see it show up as AUM. Just keep in mind, you know, just like we say in our key performance indicators, we say that the net inflows when it comes to the private strategies are based on when the capital is actually called into the fund.
That's really the focal point there, as I mentioned to Graham before too, right?
Okay. Yeah, that makes sense. Just going to your performance fees then, would you be able to quantify how much of your AUM is capable of driving performance fees? And then if you can give some color on which funds or which areas drove performance fees for this quarter.
Right. I won't go into all that detail because that's all actually in the MD&A. If you look at page 11 in the annual report, we actually provide the detail into exactly which fund categories generate the performance fees.
Okay. That makes sense.
Yeah. Just look at the footnotes underneath the table, and they actually list them all out there.
Okay. Yeah, I see them now. Okay, perfect. Just my last question. If I go to your summary financials, the trailer sub-adviser and other fees line item, I think you're breaking out direct payouts as a new disclosure for this quarter. Just wondering if you can give some color on what drives direct payouts over there, and then any color on trailer fees because they were modestly higher from what they were running at over the last four-eight quarters.
Yeah. The direct payouts are simply payouts that we have on our management fee line. They come from primarily two areas, our brokerage segment and our managed equity segment. We just broke that out to provide a little bit more disclosure of what the offsets are that are on the management fee line versus the offsets that you would see that you typically are used to seeing on the trailer and sub-adviser and other line. With regard to the trailer sub-adviser and other fees line being a little higher than the previous years, I'll have to get back to you on that. I just. All I can recall right now is it's not the trailers and it's not the sub-adviser, it's the other piece, but I just can't recall right now what exactly it was.
Send me an email and I'll flip you the details.
Okay. Sounds good. Those are all my questions. Thank you.
Thank you. As a reminder to ask at this time, please press star then one on your touch-tone telephone. Leshan, no further questions. It looks like we have a follow-up from Rasib Bhanji with TD Securities. Your line is open.
Hey. Thanks. Sorry. Just one more question. The compensation ratio, I think you flagged it as 39% for the year.
Right.
which is lower versus 44% for last year.
Yeah.
Would this be a reasonable run rate or should we expect some uptick here over this year?
Yeah. I would say no, it's not a reasonable run rate. I think if you're modeling net comp expense going forward, you wanna stay in the neighborhood of 45%. I think that's a safer bet.
Mm-hmm. Okay.
Yeah. It's gonna oscillate from time to time, just like anything else.
Okay. Makes sense. Thank you.
Thank you. This concludes the question and answer session. I would like to turn the call back over to Peter Grosskopf for closing remarks.
Thank you, operator. Well, I guess the snowstorm probably had everybody, you know, kind of busy this morning, so it's a short call. We do appreciate your interest. We look forward to reporting to you at the next quarter. Have a good weekend. Thank you, operator.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.