Nicholas Schorsch, head of American Realty Capital and the fast-growing RCS Capital Corporation (RCAP), plans to announce another acquisition in the next couple weeks, he told WealthManagment.com. In the last two days, Schorsch announced his intent to acquire liquid alternatives manager Hatteras Funds and independent broker/dealer Investors Capital. But it’s not over yet. Schorsch made his first foray into the IBD space with his surprise purchase of First Allied, which closed last month.
“There will be a deal somewhere in my system in the next couple weeks,” he said.
Schorsch wouldn’t elaborate on what kind of company he would buy, but it’s clear that he’s on the acquisition trail.
“This looks like it’s just rapid fire, and it’s not,” he said. “This is a very deliberate and thought-out plan to diversify our income streams.”
Schorsch admitted that the regulators have been tough on the IBD channel and that margins have been compressed. But he believes now’s the best time to invest in the IBD business—when firms are beat up.
“The question is, can a small broker/dealer survive? I think the answer’s ‘no.’ I think there’s going to be a massive consolidation wave. And we have a $500 million balance sheet and growing every day.”
Investors Capital, however, is not a beat up firm, Schorsch argued.
“Investors Capital has had a 25 percent increase in gross revenue in the last five years,” he said. “That’s not a company that’s dying.”
What will he buy next?
