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May 30, 2019

Piper Jaffray to quit traditional asset management business

American investment bank Piper Jaffray is pulling the plug on its traditional asset management business through the divestiture of its Advisory Research arm.

Under the agreement, Piper Jaffray will sell the midstream energy asset management segment of Advisory Research to Tortoise Capital Advisors.

The companies did not disclose the deal value.

The midstream energy business manages around $3bn in assets.

As part of the deal, the midstream energy team including senior portfolio managers Jim Cunnane, Jr. and Quinn Kiley, will move to Tortoise.

The remaining Advisory Research business will be offloaded to a partner group led by the business’ managing director Matthew Swaim.

Piper Jaffray anticipates net cash proceeds of around $60m to $70m from the deals.

The deals are slated to be completed in the second half of this year.

Piper Jaffray CEO Chad Abraham said: “We intend to reinvest the capital from this sale in our core areas of expertise through both organic investments and corporate development activity in order to generate higher returns for our shareholders.”

At present, Advisory Research accounts for nearly 5% of Piper Jaffray’s adjusted net revenue.

The investment bank snapped up Advisory Research in 2010.

Piper Jaffray president Deb Schoneman said: “The Advisory Research energy infrastructure investment team will continue to bring their deep expertise and strong investment process to existing clients, while leveraging Tortoise’s knowledge in investing across the energy value chain.

“In addition, Tortoise will bring expanded distribution and product capabilities to enhance growth potential.”

 

 

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