In the News

Did Schorsch Overpay for Cetera?

Diana BrittonJanuary 16, 2014 Rep Magazine and wealthmanagement.com

Nicholas Schorsch, head of RCS Capital Corp. (RCAP), announced Thursday that he was buying Cetera Financial from private equity firm Lightyear Capital for about one times Cetera’s trailing 12-month revenue. In the IBD space, that’s a steep multiple. Because of their small profit margins, independent broker/dealers tend to sell for 30 to 40 percent of their trailing 12-month revenue, said Jonathan Henschen, president of recruiting firm Henschen & Associates.

Schorsch bought the firm for $1.15 billion in cash; Cetera’s estimated 2013 revenue was $1.14 billion, RCAP said on an investor call this morning. The transaction was all cash,

AIG Hones Its Network Amid A Pullback

January 17, 2014By Cyril Tuohy, InsuranceNewsNet

A juggernaut has stirred.

The announcement that American General was rebranding its 1,400-strong distribution arm to American International Group Financial Network (AIG) and expanding the network’s scope will likely raise eyebrows in the corporate suites of Prudential, MetLife and Northwestern Mutual.

It’s a move that was a long time coming, some market observers said, and will breathe more life into the distribution network of the Houston-based life insurance giant. American General itself was added to the sprawling AIG umbrella in the wake of a 2001 acquisition.

For years, American General’s 1,400 advisors – mostly captive agents – ploughed through the day selling American General’s suite of protection products like life and disability insurance, but now they are going to be selling the company’s proprietary mutual funds and retirement products.

Schorsch Snaps Up J.P. Turner as Buying Spree Continues

January 14, 2014
by Janet Levaux, ThinkAdvisor

Billionaire Nicholas Schorsch and other managers at RCS Capital Corp. (RCAP) know how to get mergers and acquisitions done before the long Martin Luther King Day weekend.

The group announced plans to buy the independent broker-dealer J.P. Turner of Atlanta for $27 million, one day after reporting plans to buy Cetera Financial Group for $1.15 billion.

J.P. Turner has about 400 financial advisors and 50 insurance agents, according to the latest Investment Advisor survey, vs. 6,600 advisors at Cetera.

The deal “represents another important step in realizing RCAP’s strategic vision to become the leading financial-services firm focused on the direct-investment sector,” Schorsch,