Piper Jaffray Cos. on Monday bought River Branch Holdings, a boutique investment firm in Chicago, in its third big step this year to build investment banking services for financial companies.
The Minneapolis investment bank for years has concentrated its capital-raising services in four main industries: health care, technology, consumer products and industrials.
That exposed the company to only about half of the deal-making space in U.S. business. Executives decided earlier this year it was time to expand into financial services.
"We do see a lot of opportunity in the financial institutions industry," said Chad Abraham, co-head of investment banking and capital markets. "It's a big pool for capital-raising, and it's a market where we're definitely seeing improvements in mergers and acquisitions."
River Branch is a specialist in putting deals together between banks and other financial institutions. Terms were not disclosed.
The deal comes after Piper Jaffray last month hired five veteran investment bankers from Sterne Agee with experience in the financial services sector.
David Olson, chairman of River Branch, will serve as co-head of Piper's new financial institutions group along with Bob Hutchinson, leader of the group of Sterne Agee bankers who just joined the firm. Steven Kent, president of River Branch, will become a vice chairman of investment banking at Piper Jaffray.
With the Sterne Agee bankers staying in offices in New York and Boston, Abraham said River Branch gave Piper Jaffray's financial institutions group "an opportunity to get a big team in the Midwest, which is a region we think is strong and we obviously care a lot about."
Piper Jaffray through the spring months added eight research analysts for the financial sector and boosted its sales and trading desks on the sector, including the hiring of four executives.
Abraham said the company isn't done building the new business.
"We've made some significant hires and this purchase," he said. "We'll continue to explore hiring teams of bankers and making other acquisitions if the opportunity is right."