Schorsch's RCAP Snares First Allied

NEW YORK CITY-Nicholas Schorsch's streak as a maker of large deals continues. On Wednesday, RCAP Holdings LLC, a holding company managed by Schorsch, William Kahane, Michael Weil, Peter Budko and Brian Block, said it has signed a definitive agreement to acquire First Allied Holdings Inc., based in San Diego. Financial terms of the deal were not disclosed; as part of the transaction, private equity firm Lovell Minnick Partners will sell its majority interest in First Allied.

The deal is in line with RCAP's aspiration to bolster its presence in the independent financial advisor segment of the financial services industry, where First Allied and subsidiary the Legend Group serve more than $32 billion in assets across 300,000 clients, 1,500 independent financial advisors and 500 branches in the US. First Allied, Legend and their subsidiaries will operate autonomously under their current management structure and brands, and will look to make substantial investments in technology and expanding its staff following the acquisition, according to a release.

“In 2007, my partners and I perceived an opportunity to build an open architected, wholesale broker/dealer to distribute best-in-class investment solutions,” says Schorsch, chairman and CEO of RCAP, in the release. “We insisted that every investment product distributed by our wholesale broker/dealer, Realty Capital Securities, LLC, closely adhere to our best practices, namely: pay for performance, plain language reporting and full transparency, alignment of interests between investors and management, lower fees, routine valuations and regular liquidity events.”

In line with that, Schorsch sees the First Allied deal as “another step forward” for RCAP. “We believe that the challenges and opportunities we witnessed in the wholesale distribution channel exist in the broader retail network as well, and we see value and opportunity for growth in a paradigm shift toward a sustainable direct relationship between the mass affluent investor and their independent financial advisor,” he says in the release.