Piper Jaffray provides a range of investment banking services, including mergers and acquisitions (M&A) advice, financing, industry research, and equity and debt underwriting, sales, and trading for corporate clients, institutional investors, government entities, private equity groups, and not-for-profits. The company targets middle-market companies in the consumer, financial services, health care, media, telecommunications, technology, alternative energy, business services, and industrial sectors. It operates more than 30 US offices, plus locations in Hong Kong, London, Shanghai, and Zurich. Piper Jaffray also offers financial advisory and asset management services and has some $12 billion under management.
Piper Jaffray sold its Private Client business to UBS Financial Services in 2006 and shifted its focus to asset management, including its Fiduciary Asset Management (FAMCO) subsidiary acquired in 2007. It continued to grow that segment through the 2010 acquisition of Chicago-based Advisory Research, Inc. (ARI), which brought in more than $6 billion in assets under management in equity strategies. Piper Jaffray hopes the acquisition of ARI will provide a steady stream of revenue to help offset lower trading volumes in its institutional brokerage business.
The company spun off its private capital operations to that unit's management in 2010. Renamed North Sky Capital, the business continues to manage the approximately $700 million in existing capital commitments that it held. In another restructuring move, Piper Jaffray streamlined its European operations to focus on M&A advice and the distribution of US and Asian securities to institutional investors in Europe.
That restructuring helped the company's European operations to return to profitability in 2011; asset management revenues were up nearly 5% as well. However, the gains were not enough to offset declines in investment banking and institutional brokerage revenue (more than 20% and 15%, respectively), and total sales declined some 13% from $565.1 million to less than $490 million. Piper Jaffray reported a net loss of more than $100 million for the year as the company wrote off nearly $120 million of goodwill related to its capital markets business. – less