RCS Capital Corp., founded by real estate mogul Nicholas Schorsch, has filed the paperwork to purchase the independent broker-dealer Investors Capital Corp. The news comes on the heels of news that RCS would acquire the liquid-alternative investment firm Hatteras Funds, as well as the announcement in early September that high-profile Advisor Group president Larry Roth would join Realty Capital Securities, the non-traded REIT broker-dealer and wholesaler arm of RCS Capital, as its CEO. According to RCS, longtime Investors Capital President and CEO Tim Murphy and Hatteras Funds founder David Perkins will continue in their leadership roles with their respective firms.
Jon Henschen, president of IBD recruiting firm Henschen & Associates, praised the Investors Capital acquisition as a win for the Lynn, Mass.-based firm. “Investors Capital has been a family culture operation since inception,” he said in an interview.
“With the purchase of the firm, the family culture will stay intact, but now they will have deep pockets behind them, which is always welcome in a small-spread industry,” Henschen continued. “The terms of the purchase were contingent on staffing and culture to stay intact, so for Investors Capital, this was a win-win.”
Access to capital is a struggle in the independent channel, he added, and the Schorsch purchase “is a smart way to achieve this goal while remaining conflict-free.” Incorporated in 1995, Investors Capital has 550 registered representatives across the United States.
Still, RCAP says it has pretty much tapped funds raised from its June IPO, points out Chip Roame, head of Tiburon Strategic Advisors, which could be a signal that its “buying spree is over for now,” in an interview. Roame says RCAP’s latest purchases remind him of the playbook followed by AIG and Advanced Equities as part of their respective growth strategies.
“AIG rolled up IBDs, and Advanced Equities bought IBDS and sought specifically to distribute alternative products,” he explained in an interview. In other words, “Larry Roth’s move to RCAP is making more sense every day,” shared the consultant.