Piper Jaffray’s venture arm to spin off

Piper Jaffray Ventures, the $225m healthcare investment arm of the eponymous Minneapolis-based investment bank, is to undergo a management buyout.

Piper Jaffray, the independent brokerage and investment bank based in Minneapolis, Minnesota, is preparing to part company with Piper Jaffray Ventures, its venture capital affiliate specialising in early-stage healthcare and life science companies.

The group is to rebrand as Sightline Partners after completing a management buyout led by its senior executives. According to reports, the deal is expected to close by the end of the year. Managing partner Buzz Benson will lead the transaction, supported by managing directors Ken Higgins, Maureen Harder and Heath Lukatch

Piper Jaffray spokeswoman Dana Wade was quoted in Minnesota newspaper St Paul Pioneer Press as saying that the bank’s decision to spin off the venture business was driven by “increasing concerns in the [banking] industry around the appearance of a conflict of interest [between private equity and other financial services activities], and the prevailing view on Wall Street that private equity earnings are of lower quality.”

Piper Jaffray Ventures was established in 1992 and currently manages $225 million of capital.  In the first half of 2004, the business contributed $7.6 million to its parent’s earnings of $417 million during the period.