With business booming, Schorsch's RCS Capital eyes further growth

Nick Schorsch's RCS Capital is building the second-largest independent broker-dealer network — 9,000 registered reps and financial advisers — through several acquisitions it announced last year.
JUN 13, 2014
On the back of booming sales of nontraded real estate investment trust, RCS Capital Corp. reported $2.28 in adjusted earnings per share for last year, its first year as a publicly traded company. The company, which released its quarterly results on Wednesday, reported 28 cents a share in adjusted earnings per share in 2012. “We have achieved a great deal since our [initial public offering],” chief executive Nicholas Schorsch said during a conference call with investors Wednesday. RCS Capital, which met Wall Street's guidance with its earnings, is building the second-largest independent broker-dealer network — 9,000 registered representatives and financial advisers — through several acquisitions that it announced last year, he said. Independent broker-dealers and their reps last year sold $8.6 billion in shares of nontraded REITs affiliated with RCS Capital, which is the wholesaling and distributing broker-dealer for those REITs. At $803 million in 2013 revenue, that business line is the lion's share of the company's revenues. RCS Capital, however, has been on a breakneck path of growth and diversification away from the sales of nontraded REITs. It became a public company in June and then went on a buying binge for broker-dealers. In July, it agreed to acquire First Allied Holdings, shocking the independent broker-dealer industry. And then in October and November, respectively, it agreed to acquire Investors Capital Holdings and Summit Financial Service Group Inc. The company started the year as it left off 2013, and last month it announced agreements to buy Cetera Financial Holdings Inc., with almost 6,000 reps, by far its largest acquisition, and J.P. Turner & Co. In October, RCS Capital also agreed to buy a manager of liquid alternative investments, the Hatteras Funds Group. “We have not taken our eye off the ball with pending acquisitions,” said Edward M. Weil Jr., president. The company has received approval from regulators on its acquisition of First Allied, which was valued at $207 million and has 1,500 reps under its roof. There has been no rep or adviser attrition at First Allied, Mr. Weil said.

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