Piper Sandler bolsters research team with Cornerstone Macro acquisition

Piper Sandler Cos. will expand its nondeal equities business and research team with its acquisition of Cornerstone Macro LLC, an independent research firm that Michael Cox, co-head of global equities at Piper Sandler, labeled in an interview as a "fantastic cultural fit to our organization."

The transaction represents Piper Sandler's first whole-company acquisition since the company acquired TRS Advisors LLC in December 2020 and its fifth whole-company acquisition since February 2019.

Cox felt that Cornerstone Macro, which specifically focuses on macro research and equity derivatives trading strategy, was the perfect acquisition for Piper Sandler because those focuses had been targeted as areas for expansion by the company.

"Last year, we conducted an analysis of white spaces within our equities platform … and identified these two areas that we were looking to expand in, and Cornerstone Macro filled those perfectly," Cox said.

Cornerstone Macro's macro research team, which Cox called "best in class," will add 21 research analysts to Piper Sandler's growing research team and around 30 other professionals to the company.

Cox also cited Cornerstone Macro's options and derivatives trading effort as "very complementary to our trading business."

The Oct. 14 deal announcement was the culmination of a nearly yearlong relationship between the two companies. "We were introduced to the Cornerstone Macro team late last year and spent the past year doing diligence on the team, the fit within our organization and getting to know their people," Cox said.

Cox discussed the potential that the two companies have together, saying "We see the opportunity for significant revenue synergies by bringing the two teams together and be[ing] able to monetize their strong research platform and client relationships across our trading platform."

"Since our buy-side has been separating their payments between research and trading, the ability to have a trading platform to monetize a research platform is becoming increasingly important, so that's a big strategic part of this acquisition," Cox added.

Despite the sizable acquisition, Cox said Piper Sandler is not concerned about integrating the Cornerstone Macro team.

"What we're aiming to do and intend to do is to allow their teams to operate as they have in the past," he said. "We want to preserve what has worked at Cornerstone Macro and that includes the independence of their research effort and having a dedicated salesforce to sell the macro research product."

As 2021 wraps up, the integration of Cornerstone Macro will be a top priority for Piper Sandler. However, the company is still open-minded to another acquisition if the right situation presents itself.

"There are other areas that we see that are gaps within our offering that we can continue to look to build out and expand across our entire equities platform," Cox said.

Cornerstone Macro did not respond to a request for comment on the deal.