Stifel Financial has found a buyer for the institutional equity business of Sterne Agee Group, the financial services firm it recently agreed to acquire.

Stifel will sell Sterne Agee's equity sales, trading and research functions to CRT Capital.

"We, together with Sterne Agee's management, were committed to finding the right partner, and are very pleased that we have accomplished this goal of keeping approximately 170 professionals together so they can continue their careers as a team," Ronald Kruszewski, Stifel's chairman and chief executive, said in a press release.

As part of last month's agreement to buy Sterne Agee, Stifel announced several pieces of the company that it did not plan to keep, including its institutional equity and investment banking businesses. At the time of the announcement, Stifel also said it planned to sell Sterne Agee's mortgage business back to the unit's founders.

Representatives from Stifel and Sterne Agee on Friday said the future of the investment banking business remains under review.

The companies did not disclose a price for the equities business, though the companies said in the February release that they believed the businesses had significant value and they had been "approached by a number of suitable partners for the business and its professionals."

In that same release, the company said they could alternatively consider options such as a spinoff.

Stifel's deal for Sterne Agee follows its 2013 acquisition of Keefe, Bruyette & Woods. Stifel kept KBW intact and merged its financial services business under that brand. In a broad-based interview with American Banker Friday morning, Tom Michaud, chief executive of the KBW unit and a Stifel director, said the Sterne Agee equities and investment banking business where not being included in the deal because the businesses were too duplicative.

"There is so much overlap and there would be so much dislocation that we felt the best thing to do, the most responsible thing to do, would be to team up with [the Sterne Agee] management team and to work with them about the possibility of finding another buyer or possibly spinning it out," Michaud said. "What I can tell you is that those conversations are continuing."

Sterne Agee's retail brokerage and fixed income group had little overlap and brought strong complements, Michaud said.

Many members of Sterne Agee's investment banking team focused on financial institutions are former KBW and Stifel employees, including those who were affected by that acquisition.

Sterne Agee's research department includes some of the banking industry's well-known analysts, including Terry McEvoy, who joined the firm as the head of its bank research team in April from Oppenheimer. CRT said in its own release that Sterne's equities business has relationships with more than 1,000 institutions.

"This transaction represents a transformational opportunity for CRT," Ted Janulis, CRT's chief executive, said in the company's release. "We will be significantly advancing our growth strategy by bringing together Sterne Agee's preeminent equity sales, trading and research business and CRT's well-established franchise in research, equities, credit and investment banking."

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