Piper Jaffray will acquire Fiduciary Asset Management, marking the investment banks return to the asset management business. In a conference call, Piper Jaffray executives said they will pay an initial $66 million to buy 100% of FAMCO, with further significant payments in the future should the asset manager achieve revenue and cash flow targets. FAMCOs disciplined investment process, with roughly $9 billion in assets under management and substantial capacity to grow, will give Piper Jaffray the high-margin, fee-based stable revenue and income stream it was looking to add to its business mix, executives said.
CFO Thomas Schnettler said Piper Jaffray will remain on the lookout to expand its asset management business and product capabilities, using the FAMCO platform, through M&A and strategic hires.
Piper Jaffray had a money management arm, Piper Capital Management, which had $13 billion in assets under management when U.S. Bancorp bought Piper Jaffray in 1998. U.S. Bancorp retained the asset management operation when it spun out Piper Jaffray and listed its shares at the end of 2003.
For the latest deal, Putnam Lovell NBF advised Piper Jaffray, and UBS Securities advised FAMCO.