Piper Jaffray announced on Tuesday that it will transition its private capital business to become an independent firm. It expects the transition to take effect Dec. 1.

This fund-of-funds business will transition to the key principals of the private capital subsidiary, who will rename the independent company North Sky Capital. Scott Barrington, an 11-year veteran of the private equity business and a Piper Jaffray & Co. managing director, will lead the concern.

North Sky Capital will manage each of the funds raised by Piper Jaffray Private Capital, comprising about $700 million of committed capital. In connection with the transition, the existing funds will be rebranded with the North Sky name.

Piper Jaffray, of Minneapolis, will continue its current capital commitments to the funds, the firm said.

For its second quarter ended June 30, Piper Jaffray announced net income of $7.4 million, or 36 cents per diluted common share, compared with net income of $11.6 million, or 59 cents per diluted common share, for the second quarter of 2009.

Piper Jaffray shares closed up 3 cents on Tuesday at $29.09.