Piper Jaffray Sheds Asset Management Business in Two-Fold $60 Million-Plus Sale
Piper Jaffray's CEO Chad Abraham and president Deb Schoneman.

Piper Jaffray Sheds Asset Management Business in Two-Fold $60 Million-Plus Sale

The Minneapolis-based investment company is selling part of its Advisory Research Inc. (ARI) division to Tortoise Capital and the rest to ARI executive Matthew Swaim. It will use the funds to focus on its banking platforms.

International investment firm Piper Jaffray is jettisoning its entire traditional asset management business in the form of a sale worth about $60 million to $70 million in net cash.

In two separate transactions, the Minneapolis-based company will sell the midstream energy business portion of its Advisory Research Inc. (ARI) division to investment firm Tortoise Capital Advisors. The remainder will go to a partner group led by Advisory Research managing director Matthew Swaim.

“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,” says Deb Schoneman, president of Piper Jaffray, in a statement. “In addition, Tortoise will bring expanded distribution and product capabilities to enhance growth potential.”

Schoneman adds that the investment is necessary for Advisory Research to scale its work to its maximum level of potential. What’s more, Piper Jaffray CEO Chad Abraham says the sale will allow Piper Jaffray to sharpen its focus on its strengths.

The investment company acquired ARI in 2010 but has since devoted most of its energy to its banking platforms, so ARI currently represents just 5 percent of Piper Jaffray’s adjusted net revenue.

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

For the buyers’ parts, Swaim refers to the deal as returning the ARI business to its “legacy partnership roots,” while Tortoise lauds the deal’s significance for both Tortoise and the Advisory Research energy infrastructure team.

“Bringing together two of the longest tenured midstream energy teams will create an even stronger and deeper combined team,” says Tortoise CEO Kevin Birzer.

The transactions are both expected to close in the second half of 2019, pending standard procedures.