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Piper Jaffray Splits With Advisory Research Investment Management

Acquired in 2010, the asset management business has been wholly bought out by its employees.

Advisory Research Investment Management has completed its management-led buyout from investment bank Piper Jaffray, the firm announced Friday.   

The institutional investment firm, which Piper Jaffray acquired in 2010, manages roughly $3.1 billion in assets with the deal complete, according to the announcement.   

Advisory Research is now completely employee-owned, which its executive chairman and managing director Matthew Swaim said will help the firm attract investment talent and make better long-term decisions for clients. “We do believe that employee ownership provides great incentives to our client base,” Swaim said by phone Friday. “We think it’s a great aspect to have in the investment business.” He added that the deal was completely capitalized by the firm’s own management. 

Advisory Research had sold its master limited partnership energy unit to Tortoise Capital Advisors in September, an announcement from Tortoise shows. The firm’s management then bought out the remaining business from Piper Jaffray.

Prior to these transactions, Advisory Research operated as a separate segment under Piper Jaffray, while receiving investments and support from the firm, Swaim said. 

The investment bank announced in May that it had entered into a letter of intent with Advisory Research’s management team to sell. The firm also announced the Tortoise deal at the time and said it expected to generate net cash proceeds of approximately $60 million to $70 million from the deals. Those estimates were exclusive of potential earn-out proceeds.  

“Without significant investment, the business lacks the potential to scale to a level that will represent a meaningful part of Piper Jaffray’s overall business mix,” said Deb Schoneman, president of Piper Jaffray, in a May statement. A spokesperson for the firm did not respond to an email seeking comment Friday.  

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According to Advisory Research, it will run four strategies: U.S. value equity, U.S. growth equity, global core equity, and energy equity. 

“Nothing will change for our clients — they remain our top priority, and will still receive a high-touch service experience, the benefits of an institutional infrastructure, and a dedication to competitive investment results across our product base,” said Ellen Freeman, head of operations and managing director, in a statement. 

The newly independent firm will be led by partners Matthew Swaim, Drew Cupps, Matthew Dougherty, Ellen Freeman, Christopher Harvey, Adam Steffanus, Mike Valentinas, and Bruce Zessar. 

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