RCS Capital Corporation (NYSE: RCAP), the nation’s leading distributor of non-traded direct investment offerings, announced that its wholesale broker-dealer subsidiaries, Realty Capital Securities LLC, SC Distributors LLC and The Hatteras Funds, raised $407 million of total equity capital in June through 30 direct investment programs and registered investment companies.
On Monday, the stock closed at $5.62, down 5.7 percent from an opening price of $5.96, continuing its dizzying decent from a high of $39.50 on April 1, 2014.
RCS Capital’s wholesale broker-dealer subsidiaries continued to report industry-leading results through the first half of 2015, with June marking the fourth consecutive month of more than $400 million of total equity capital raised, but still markedly below the $655 million raised solely by Realty Capital Securities in September 2014, the month just prior to the revelation sister company American Realty Capital Properties’ (NYSE: ARCP) accounting scandal.
For the second quarter, total equity capital raised was approximately $1.3 billion, representing a 20 percent increase from the first quarter. Sales of direct investment programs totaled nearly $376 million for the month of June, and $1.2 billion in the second quarter, representing a 24 percent increase from the first quarter. Sales of non-traded REITs totaled $324 million for the month of June, and nearly $1.0 billion in the second quarter, representing a 31 percent increase from the first quarter.
Bill Dwyer, chief executive officer of Realty Capital Securities, commented, “We are pleased to report a 20 percent increase in total equity sales in the second quarter despite an overall industry slowdown in sales. June equity sales marked a fourth straight month of over $400 million of equity capital raised, again demonstrating solid month over month results, especially considering the closings of offerings, including our highly successful Business Development Corporation of America program; these closings create challenging month-over-month comparables. We continue to believe that strong equity sales in the second half of 2015, driven in part by a number of completed and anticipated liquidity events, coupled with strategic expense reduction across the platform, will result in positive Adjusted EBITDA for the business for the full year 2015.”
Last week, The DIWire reported that after a tumultuous year, RCS Capital reached important agreements with its first and second lien lenders to amend its leverage ratio covenants and other modifications. In addition, the firm has agreed to elect seven directors to its board, increase the number of Class A shares the company will issue, and made an amendment to its corporation equity plan.
RCS Capital Corporation is a full-service investment firm with operating subsidiaries including retail advice services, wholesale distribution, investment banking, capital markets, investment research, investment management and crowdfunding.