Apollo to Acquire AR Capital, RCS

NEW YORK CITY—Apollo Global Management is taking a majority stake for $378 million in AR Global, a newly formed company that will own substantially all of the asset management business of Nicholas Schorsch's AR Capital. Schorsch will serve as senior managing director of the new company; it will also include RCS Capital, which Apollo is acquiring separately for $25 million. AR Capital, which focuses on income solutions for retail investors, had approximately $19 billion of assets under management, including $16 billion in real estate, as of June 30.

“AR Capital participates in a sector that is in a state of transition due to both changing regulations and the evolving needs of investors,” says Marc Rowan, co-founder and senior managing director of Apollo. “Apollo's contrarian approach embraces businesses and industries that are in the midst of change, which we believe creates attractive opportunities. We believe Apollo is well positioned to continue to play a positive role in helping the industry evolve to offer more institutional-quality products and services to individual investors and their financial advisors.”

Rowan and Schorsch will both serve on the AR Global board, which will include six Apollo representatives, one of whom will be named chairman. Schorsch's partners in AR Capital—Peter Budko, William Kahane and Michael Weil—will also serve on the board, and Kahane will be interim CEO until a permanent replacement can be found.

Along with acquiring RCS Capital, Apollo is also making an investment in its retail advice business, Cetera Financial Group. The AR Global deal, which will more than double Apollo's real estate AUM to $27 billion, is expected to close in 60 days; GlobeSt.com will provide additional information as it becomes available.