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September 10, 2013 at 09:52 AM
Larry Roth left his role as the head of Advisor Group, the 6,000-rep independent broker-dealer network owned by AIG, on Thursday to become CEO of Realty Capital Securities, the nontraded REIT broker-dealer and wholesaler arm of RCS Capital led by Nicholas Schorsch.
With parent company RCAP Holdings’ June announcement that it was buying independent broker-dealer First Allied Securities, industry observers wonder exactly what prompted Roth to make his big jump and what he’ll be up to at Realty Capital Securities.
“My move is all about the opportunity at Realty Capital and not at all about the Advisor Group and AIG,” Roth said in an interview with ThinkAdvisor late Monday, when he retired from his role as chair of the board of the Financial Services Institute (hosting its Financial Advisors Summit this week in Washington, D.C.). “Realty Capital has been hugely successful in the last several years in growing alternatives-based products and distribution and its business of nontraded REITs and taking a number of those investments public.”
In his former role as head of Advisor Group and its IBDs — FSC Securities Corp., Royal Alliance Associates, Sagepoint Financial and Woodbury Financial Services — Roth says he had been watching and interacting with Realty Cap.
“I’ve become well acquainted with the firm and its senior management,” he said. “They are building something that has not been in the market, especially in the independent contractor space, in a big way in the past.”
Part of his new job will be to help the firm build an alternatives platform for independent and other advisors that includes some proprietary and third-party products, both in real estate and other areas.
RCS’ operations include the distribution of direct-investment offerings, like public nonlisted real estate investment trusts and business development companies offered by American Realty Capital (ARCP), as well as mutual funds. RCS also serves as an investment bank in the direct-investment channel; it worked as an advisor on $13.7 billion in equity listings and real estate mergers and scquisitions over the past year, according to the company.
“Based on what I’ve done in the past and on the current momentum of the team, I see it as an excellent time to be joining them,” the executive said. “I’m getting in on the ground floor in many ways.”
Roth, who has been in the financial services industry for more than 30 years, says that in many ways, his new post is the perfect fit: “It’s the right time, I have the right business skill set, and it’s super exciting.”
In 1990, Roth took over the ownership of Vestax Securities and expanded the independent broker-dealer to include more than 700 advisors before selling it to ING Group and becoming CEO of ING’s U.S. Retail Group.
In 2001, he left ING to become a managing director at the New York-based M&A advisory firm Berkshire Capital Corp., where he worked for five years before joining Royal Alliance as its president and CEO. That background should prove very useful, he says, in helping RCS with M&A and distribution. “I think I can be an important member of the business,” hesaid.
Certainly, top managers at RCAP and RCS agree. “His experience and strategic vision will contribute meaningfully to RCS’ ability to grow its business and expand its role as the pre-eminent open architecture distribution platform for nontraded publicly registered securities,” Schorsch, executive chairman of RCAP, said in a press release.
To-Do List
In terms of Roth’s distribution tasks, he says he’ll be mainly focused on the independent channel. “Our core business is with independent contractors,” he said.
“It’s a three-legged stool, with IBDs, as well as banks/financial services and more recently RIAs,” Roth said. “The wirehouse channel will be the fourth leg, and we are just beginning to build it out … and expect to have some announcements about this in the first half of 2014.”
