RCS Capital (RCAP) has shared more details on how it is restructuring itself and enabling the Cetera Financial Group of independent broker-dealers to become a separate entity.
Meanwhile, speculation continues as to what will happen to the AIG Advisor Group, with at least one recruiter saying some registered reps have been told it is poised to be sold to Lightyear Capital, Cetera’s previous owner.
In regulatory filings on Wednesday, RCS Capital revealed that private-equity firms Carlyle Investment Management and Fortress Investment Group, along with asset manager Eaton Vance Management, are letting the company forgo debt payments. These entities are poised to see the money they are lending Cetera turn into equity.
This news came two days after RCAP said it planned to file for bankruptcy and that certain “key stakeholders” were set to invest $150 million in its IBD group, which includes 10 broker-dealers and some 9,000 affiliated advisors.
The latest SEC filings state that RCS Capital can keep the proceeds of its sale of Hatteras Funds, rather than using them to prepay loans. In addition, RCAP is required to present its retention plan for the Cetera advisors — who are led by Larry Roth, former head of the AIG Advisor Group — to lenders by late-Friday.
AIG Advisor Group Deal in the Works?