Not letting up on their acquisition of IBDs, Nicholas Schorsh’s RCAP Holdings is in exclusive negotiations with another unnamed BD, according to an SEC filing. Investment News reports that with four of its five BD purchases still pending, RCAP needs to wait before it can continue its acquisition strategy, which began last June.
Shortly after it went public, RCAP purchased First Allied; the four pending acquisitions would add a total of 8,900 reps and $1.7 billion in revenue. The Cetera acquisition announced in January is the largest of the four.
Since last December, shares of RCAP, the publicly traded subsidiary of American Realty Capital — of which Schorsch is chair and CEO — have doubled. Writes Bruce Kelly, who covers IBDs and REITs for Investment News: “Mr. Schorsch over the past five years has turned the once-clubby nontraded real estate investment trust industry on its head, delighting advisers and investors with a speedier return of their capital than typical in the industry.”
Investors in smaller IBDs are eagerly awaiting the call as the once-maligned, low-margin, highly regulated business seems to be attractive — at least to RCAP. The question is whether retirement planning is part of the strategy, which seems likely.
