Indie Advisor

It's Official: RCAP's Schorsch Owns First Allied

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Non-traded REIT aficionado Nick Schorsch surprised many in the industry in June, when he announced he was getting into the independent broker/dealer business. Schorsch just today closed the deal to purchase IBD First Allied Holdings, which includes First Allied Securities and The Legend Group. The terms of the deal were not disclosed.

The deal encompasses $32 billion in assets across 300,000 clients and 1,500 independent financial advisors. According to a press release, First Allied and The Legend Group would continue to operate independently under their current management structure. Adam Antoniades, CEO and president of First Allied, will continue in his role.

Former head of AIG’s Advisor Group Larry Roth recently left to join Schorsch’s Realty Capital Securities, the wholesale broker/dealer and investment banking entity of American Realty Capital, as CEO.

At a time when many private equity firms are pouring dollars into the IBD business, the sale marks a reverse trend, as First Allied’s private equity owner Lovell Minnick Partners sheds its stake in the firm.

Some have questioned whether First Allied would be used as a distribution arm for selling its non-traded REIT products. But Schorsch has denied that. RCAP Holdings, the entity that is purchasing First Allied, is a separate entity from American Realty and is not connected to the real estate capabilities, Schorsch said in our June story.

“This is not about buying distribution,” he said in June. “We already have 51 percent market share in the wholesale business, and we just shut down one of our selling groups because we couldn’t take any more demand. So the last thing we need is more sales in that space.”

In August, REP. magazine named Schorsch one of 2014’s Ten to Watch, not only for his domination in the REIT space, but also for this recent leap into the advisory space.

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