RCAP Holdings LLC, a holding company managed by Nicholas S. Schorsch and a team of managers, is acquiring First Allied Holdings Inc., an independent broker-dealer, RCAP announced Wednesday.
First Allied, together with The Legend Group, serves over $32 billion in assets across 300,000 clients, 1,500 independent financial advisors and 500 branches in the United States. The deal is the latest in a series of acquisitions and mergers by firms controlled by Schorsch, who is an active player in the real estate investment trust business.
Following this transaction, First Allied, The Legend Group and their subsidiaries will continue to operate autonomously under their current management structure and respective brands as part of RCAP Holdings.
The transaction with RCAP Holdings, based in New York, will provide significant financial resources to First Allied, based in San Diego, to make substantial investments in technology, add professionals and support personnel, expand its 401(k) and 403(b) platforms, and enhance advisor marketing and lead generation programs, RCAP says.
The terms of the acquisition were not released but Schorsch, CEO and chairman of RCAP Holdings, says RCAP has committed $200 million to the purchase and growth of the company. That investment is only the beginning, according to Schorsch, who says he plans to invest more in the future towards the growth of First Allied.
The acquisition was purely an investment for RCAP and not a move to gain more distribution outlets for the RCAP nontraded REITs, Schorsch says.
”It is a great time to invest, with interest rates low, and First Allied is a first rate company. It is one of the top five broker-dealers in the country, excluding LPL and Ameriprise, which are public companies now. We already have a wholesale broker-dealer and we wanted a retail one that deals with the mass affluent, those with $1 million to $2 million in assets,” Schorsch says.