For $60MM to $70MM, an I-Bank Exits Asset Management
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Thursday, May 30, 2019

For $60MM to $70MM, an I-Bank Exits Asset Management

A midwestern investment bank is preparing to exit the traditional asset management business through a pair of deals, expected to generated between $60 million and $70 million in total (not counting earn outs).

Debbra Lynn Schoneman
Piper Jaffray
Yesterday Deb Schoneman, president of Minneapolis-based Piper Jaffray, confirmed that Leawood, Kansas-based Tortoise Capital Advisors has definitively agreed to buy the midstream energy business of Piper Jaffray's Advisory Research, Inc. [profile], and that a management team led by Matthew Swaim aims to buy the rest of Chicago-based Advisory Research. Those Advisory Research partners have signed a letter of intent. The deals are expected to close in the second half of 2019.

"We are thrilled to return the ARI business to its legacy partnership roots," states Swaim, managing director and executive committee chairman at Advisory Research. "We will continue to invest in premier investment talent, maintain our intense focus on client success and grow our niche investment strategies with like-minded clients."

Advisory Research has more than $6 billion in AUM, so the combined expected purchase prices translate into between 1.0 percent and 1.2 percent of its AUM. About $3 billion of its AUM is on the midstream energy asset management business that Tortoise (a private equity-backed alternative asset manager) has agreed to buy, and that team includes senior PMs Jim Cunnane, Jr. and Quinn Kiley, who will join Tortoise as part of the deal.

Ardea Partners is the advisor on both deals, while Faegre Baker Daniels is providing legal advice.

FA, the Minneapolis/St. Paul Business Journal, the Minneapolis Star Tribune, Pensions & Investments, and Seeking Alpha all reported on the news.

Piper Jaffray first bought Advisory Research in 2010.

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