Schorsch-Led Group to Buy Strategic Capital

RCS Capital aims to expand the alternative products it offers advisors and their retail investor clients

RCS Capital aims to expand its alternative product offerings. RCS Capital aims to expand its alternative product offerings.

Nicholas Schorsch and the businesses he leads are at it again.

Early Tuesday, RCS Capital (RCAP) said it is working to buy Validus Strategic Capital Partners, which owns SC Distributors, an alternative-investment group, and Strategic Capital Advisory Services, a provider of advisory and operational services to non-exchange traded alternative investment products.

The deal is expected to close in the third quarter.

“The acquisition of Validus Strategic Capital Partners allows us to further diversify RCAP’s wholesale distribution platform with more institutional-quality investment products which are not sponsored by AR Capital,” said Schorsch, executive chairman of RCAP, in a press release.

“We look forward to working with SC’s experienced management team and investment professionals while leveraging their proven distribution model and innovative technology platform,” the executive added. “This acquisition is part of our overall vision to provide our growing retail investor base with multiple investment solutions through our family of leading investment vehicles.”

The entities being acquired currently sell products like the Carter Validus Mission Critical REIT, RREEF Property Trust, Sierra Income Corporation TriLinc Global Impact Fund and Greenbacker Renewable Energy Co. Year-to-date sales are $775 million, according to RCAP.

Schorsch is also executive chairman, as well as CEO, of American Realty Capital Properties (ARCP). Last week, ARCP agreed to a $1.5 billion sale-leaseback deal for more than 500 Red Lobster restaurant properties.

The news came just three days after RCS Capital said it was restructuring the executive lineup of those managing its 9,000 independent reps. These shifts included the departure of Valerie Brown as the head of Cetera Financial and the ascension of Larry Roth to the post of CEO for RCAP’s independent broker-dealer operations.

(The IBD business incudes First Allied Securities and the four Cetera Financial Group broker-dealers, which have already been bought, in addition to Investors Capital, Summit Brokerage Services and J.P. Turner & Co., which are in the process of being acquired by RCAP.)

“Together with the upcoming closing of the Hatteras Funds, this transaction allows RCAP to distribute a broader complement of liquid and limited liquidity alternative investment options, all designed to address the needs of retail investors,” said RCAP CEO William Kahane, in a statement.

“We are excited to partner with the SC team and expand RCAP’s ‘best-in-class’ alternative investment solutions platform,” Kahane explained. “Moving forward, we will continue to look for opportunities to use our strong balance sheet effectively to further expand and differentiate our business.” 

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Check out Schorsch Strikes Again: ARCP to Buy Red Lobster Properties on ThinkAdvisor.

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