NEW YORK CITY—RCS Capital Corp., which has bought a series of retail broker-dealers in recent months, is now buying on the wholesale side of alternative investment vehicles.The company said Tuesday it had reached an agreement to buyValidus Strategic Capital Partners, which owns SC Distributors LLC and Strategic Capital Advisory Services. A spokesman for RCAP confirmed published reports that the deal is for $80 million.
SCD and SCAS will operate as a standalone business under the SC brand alongside RCAP’s existing wholesale distribution brokerage. SC currently distributes Carter Validus Mission Critical REIT, RREEF Property Trust, Sierra Income Corp., TriLinc Global Impact Fund and Greenbacker Renewable Energy Co., with year-to-date sales of $775 million. SCAS provides advisory and operational services to non-exchange traded alternative investment vehicles, while SCD distributes these vehicles.
Following the close of the deal, which is expected to occur in the third quarter, the existing SC management team—including Patrick Miller and Kenneth Jaffe, the respective presidents of SCD and SCAS—will remain in place. “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,” says Nicholas Schorsch, executive chairman of RCAP. He says the acquisition fits with “our overall vision to provide our growing retail investor base with multiple investment solutions through our family of leading investment vehicles.”
RCS Capital, the investment banking arm of RCAP, served as exclusive financial advisor and Proskauer Rose LLP served as legal advisor to RCAP. On the VSCP side, Moelis & Co. served as exclusive financial advisor and Morris, Manning & Martin LLP served as legal advisor.
In April, RCAP closed on its all-cash, $1.15-billion acquisition of the Cetera Financial Group from affiliates of Lightyear Capital. First announced in January, the deal creates the second largest independent financial advisor network in the US.