Piper Sandler Acquires IRP Cornerstone Macro

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Minneapolis-based regional investment bank, Piper Sandler (NYSE: PIPR), recently announced that it has entered a definitive agreement to acquire independent research boutique, Cornerstone Macro, for an undisclosed sum.

Recently Announced Deal

Investment bank Piper Sandler announced that it is acquiring Cornerstone Macro, an independent research firm that provides highly regarded macro-economic, investment strategy, and government policy research to institutional investors.  The acquisition is meant to strengthen Piper Sandler’s institutional equities research, sales, and trading platform. Upon closing, Cornerstone Macro will provide its investment research as Piper Sandler & Co.’s macro research team.

Founded in 2013, Cornerstone Macro employs more than 50 staff, including 21 research analysts who produce high quality macro, thematic and quantitative research on global economics, fiscal and tax policy, monetary policy, global asset allocation, portfolio strategy, and research on energy, renewables, and technology.  In addition, Cornerstone Macro’s options strategy team provides highly regarded derivative strategy and trading.  Cornerstone Macro  serves clients across the globe with offices in New York and Washington, D.C.

A number of Cornerstone Macro’s research analysts have been ranked in the top three annually in Institutional Investor’s All-America Research Survey.  This includes:

  • Co-founder Nancy Lazar leads the economic research team and has been an Institutional Investor-ranked economist for the past two decades, ranking in the top in each of the years since Cornerstone Macro was founded.
  • Co-founders Andy Laperriere, head of U.S. policy research, and Roberto Perli, head of global policy research ranked No.1 in the Washington Research Team category for five out of six years while at Cornerstone Macro. Andy ranked No. 2 as an individual in the Washington Research category the past two years.
  • Michael Kantrowitz, head of the portfolio strategy team ranked in the top three in 2020.

Deb Schoneman, president of Piper Sandler explained the rationale for the acquisition, saying  “Cornerstone Macro’s world-class research team with over 260 years of combined experience offers our clients market-leading macro insights and analysis of global trends.  They also bring a deep expertise in equity derivatives strategy and trading that will further strengthen our product offerings.”

Nancy Lazar, co-founder and chief global economist of Cornerstone Macro commented, “The partnership with Piper Sandler will complement our existing business and provide our clients with an industry-leading trading desk and one of the largest and most experienced distribution teams on Wall Street.”

The transaction is expected to close in the first quarter of 2022 and is subject to customary closing conditions.  Financial details of the acquisition have not been made public.

Our Take

Founded in 1895 and headquartered in Minneapolis, Piper Sandler has built a global investment bank through a series of spin-offs, acquisitions, and mergers.  In 2003, Piper Jaffray became a publicly held company following its spin-off from US Bancorp.  In 2013, the firm acquired muni specialist Seattle-Northwest Securities Corp.  In addition, the firm acquired Edgeview Partners, LP, a middle-market M&A boutique. 

In 2015, Piper Jaffray acquired River Branch Holdings, bolstering its sector coverage in financial institutions, and it expanded its fixed income services group with the acquisition of BMO Capital Markets GKST.  In 2016 Piper acquired energy investment bank Simmons & Company International.  In 2019 the firm acquired equity trading firm Weeden & Co., L.P. almost doubling equities revenue. Then, in 2020, Piper Jaffray acquired financial services oriented investment bank Sandler O’Neill + Partners.  The combined firm was named Piper Sandler Companies. 

In fact, Piper has increased its research headcount by 84% over the last two years with the addition of Sandler O’Neill and Cornerstone Macro. The research team currently covers over 1,000 companies and ranks No. 1 in total names under coverage in the SMID cap category.

Piper Sandler’s acquisition of Cornerstone Macro makes considerable sense for both firms.  For Piper, the acquisition is consistent with its history of growing through acquisition, and it gives it a top rated macro, portfolio strategy and policy research team that it can distribute to its fundamental equity research clients.  For Cornerstone Macro, the acquisition provides its clients with strong trade execution and research distribution services.  In addition, the deal enables the Cornerstone Macro team to escape the extremely difficult market environment that independent research firms (and particularly firms producing macroeconomic research) have faced in the wake of MiFID 2.

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About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

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