Advisors know Nicholas Schorsch, chairman and CEO of American Realty Capital, as the dominant player in the non-traded REIT space. He boasts 51 percent market share in real estate direct investment and $10 billion in capital.

But Schorsch surprised the industry when he recently announced he and his partners would acquire independent broker/dealer First Allied, with its 1,500 advisors and $32 billion in AUM, from private equity firm Lovell Minnick.

“We believe that the retail broker/dealer systems are about to have a really good five to 10 years. We’re at the bottom of the cycle,” he says.

But there are contrarian moves, and there are suicidal moves. The IBD business is in a tough spot, with the increasing burdens of regulation and the need to invest in new technology. With interest rates low, traditional revenue sources have dried up and margins are tight. Does he get something the rest of us don’t?

“I said to somebody a few months back, ‘We’re all playing checkers, and Nick’s playing three-dimensional chess,’” says Kevin Gannon, president and managing director of Robert A. Stanger & Co., a real estate investment banking firm specializing in non-listed REITs. “He’s a couple moves ahead of us all.

“There were people in the [non-traded REIT] space who thought he was a little bit of a wild card early on, but they’re all believers now because he’s executed and he’s executed well,” Gannon says.

One way he has done that is by going for the exits early on. Just this year, he’s created $3 billion in profits through liquidity events. Shares of ARCP, a publicly traded REIT, for example, have risen from $10 to about $15, as of July 23.

Schorsch has also been criticized for championing best practices in non-traded REITs, which are often bashed for their high fees, illiquidity and opaqueness. In 2008, he eliminated internalization fees, which are typically paid once a REIT reaches critical mass and the board elects to internalize the management functions. In 2010, he lowered his fees, and recently he did away with asset management fees until investors see a full-cycle liquidity event.

All of this has made some in the industry eye him with disdain. “I didn’t kill Kennedy, but I did kill internalization fees,” he says.

As far as First Allied, time will tell whether Schorsch has made the right call. If the b/d industry continues to consolidate, he expects to be a part of it.