Tortoise Capital Advisors has agreed to acquire the midstream energy asset management business of Advisory Research from parent company Piper Jaffray Cos., Tortoise spokeswoman Deborah Kostroun confirmed in an email. Financial terms of the deal were not disclosed.
The Advisory Research midstream energy infrastructure team has approximately $3 billion in assets under management in both balanced and equity strategies, through mutual funds, subadvised closed-end funds and separate accounts.
Piper Jaffray announced in a news release it is selling Advisory Research through two separate transactions. In addition to selling Advisory Research's midstream energy business to Tortoise, Piper Jaffray will also sell its remaining business to a partner group led by Matthew Swaim, managing director and executive committee chairman at Advisory Research. These two sales will result in Piper Jaffray exiting its traditional asset management business.
Piper Jaffray CIO Timothy L. Carter could not be immediately reached for additional information.
Piper Jaffray expects to generate net cash proceeds from these two transactions of approximately $60 million to $70 million, exclusive of potential earn-out proceeds.
The Advisory Research midstream energy infrastructure team, including managing directors and senior portfolio managers Jim Cunnane Jr. and Quinn Kiley, will join Tortoise. Mr. Cunnane was also CIO of the master limited partnership and energy infrastructure team. The existing team will maintain oversight of Advisory Research's current midstream energy infrastructure business and client relationships.
The transaction is expected to close during the second half of 2019, subject to customary regulatory and closing conditions, including fund board/shareholder approval.
Tortoise had $20.9 billion in assets under management as of April 30, including $16.7 billion in energy AUM.