Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Jun. 30, 2013 | Feb. 14, 2014 | Feb. 14, 2014 | |
Common Class A [Member] | Common Class B [Member] | |||
Document Information [Line Items] | ' | ' | ' | ' |
Entity Central Index Key | '0001568832 | ' | ' | ' |
Entity Registrant Name | 'RCS Capital Corp | ' | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' | ' |
Document Type | '10-K | ' | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' | ' |
Amendment Flag | 'false | ' | ' | ' |
Entity Common Stock, Shares Outstanding | ' | ' | 26,499,999 | 1 |
Entity Well-known Seasoned Issuer | 'No | ' | ' | ' |
Entity Voluntary Filers | 'No | ' | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' | ' |
Entity Public Float | ' | $41,824,860 | ' | ' |
Consolidated_Statements_of_Fin
Consolidated Statements of Financial Condition (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash and cash equivalents | $45,744,000 | $12,683,000 |
Available-for-sale securities | 8,528,000 | 0 |
Investment securities | 5,874,000 | 0 |
Selling commission and dealer manager fees | ' | ' |
Due from related parties | 1,072,000 | 1,176,000 |
Due from non-related parties | 21,000 | 179,000 |
Reimbursable expenses | ' | ' |
Due from related parties | 18,772,000 | 1,490,000 |
Due from non-related parties | 584,000 | 61,000 |
Investment banking fees (related party) | 21,420,000 | 0 |
Due from RCAP Holdings and related parties | 7,156,000 | 0 |
Property and equipment (net of accumulated depreciation: 2013 - $198; 2012 - $48) | 458,000 | 113,000 |
Prepaid expenses and other assets | 1,372,000 | 509,000 |
Deferred income taxes | 126,000 | 0 |
Total assets | 111,127,000 | 16,211,000 |
Liabilities and Stockholders' Equity | ' | ' |
Accounts payable | 4,695,000 | 1,303,000 |
Accrued expenses: | ' | ' |
Due to related parties | 16,736,000 | 0 |
Due to non-related parties | 5,894,000 | 4,175,000 |
Payable to broker-dealers | 1,259,000 | 5,007,000 |
Deferred revenue (related party) | 2,567,000 | 0 |
Dividends payable | 450,000 | 0 |
Total liabilities | 31,601,000 | 10,485,000 |
Additional paid-in capital | 43,376,000 | 0 |
Accumulated other comprehensive loss | -46,000 | 0 |
Retained earnings | 1,499,000 | 0 |
Member's equity | 0 | 5,726,000 |
Total stockholders' equity | 44,856,000 | 5,726,000 |
Non-controlling interest | 34,670,000 | 0 |
Total liabilities and equity | 111,127,000 | 16,211,000 |
Common Class A [Member] | ' | ' |
Accrued expenses: | ' | ' |
Common Stock | 3,000 | 0 |
Common Class B [Member] | ' | ' |
Accrued expenses: | ' | ' |
Common Stock | $24,000 | $0 |
Consolidated_Statements_of_Fin1
Consolidated Statements of Financial Condition (Parenthetical) (USD $) | Dec. 31, 2013 |
Common Class A [Member] | ' |
Common stock, par value (in dollars per share) | $0.00 |
Common stock, shares authorized (in shares) | 100,000,000 |
Common stock, shares issued (in shares) | 2,500,000 |
Common stock, shares outstanding (in shares) | 2,500,000 |
Common Class B [Member] | ' |
Common stock, par value (in dollars per share) | $0.00 |
Common stock, shares authorized (in shares) | 100,000,000 |
Common stock, shares issued (in shares) | 24,000,000 |
Common stock, shares outstanding (in shares) | 24,000,000 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Selling commissions: | ' | ' | ' |
Related party products | $400,560 | $161,370 | $82,397 |
Non-related party products | 116,074 | 19,111 | 22,996 |
Dealer manager fees: | ' | ' | ' |
Related party products | 227,420 | 94,761 | 56,935 |
Non-related party products | 56,381 | 10,100 | 10,820 |
Investment banking advisory services: | ' | ' | ' |
Related party products | 45,484 | 0 | 0 |
Non-related party products | 0 | 925 | 0 |
Transfer agency revenue (related party) | 8,667 | 0 | 0 |
Services revenue: | ' | ' | ' |
Related party products | 24,968 | 970 | 1,374 |
Non-related party products | 492 | 54 | 368 |
Reimbursable expenses | ' | ' | ' |
Related party products | 6,375 | 186 | 115 |
Non-related party products | 100 | -25 | 16 |
Other | -26 | 45 | -292 |
Total revenues | 886,495 | 287,497 | 174,729 |
Third-party commissions: | ' | ' | ' |
Related party products | 400,598 | 161,399 | 82,301 |
Non-related party products | 116,074 | 19,111 | 22,967 |
Third-party reallowance: | ' | ' | ' |
Related party products | 65,018 | 24,385 | 11,788 |
Non-related party products | 19,563 | 2,464 | 3,139 |
Internal commissions, payroll and benefits | 115,994 | 45,865 | 29,174 |
Conferences and seminars | 25,486 | 14,938 | 12,135 |
Travel | 7,623 | 6,235 | 5,942 |
Marketing and advertising | 8,611 | 2,680 | 303 |
Related party expense allocations | 930 | 8 | 246 |
Non-related party expenses | 3,663 | 1,559 | 1,672 |
Data processing | 6,268 | 0 | 0 |
Management fee | 5,996 | 0 | 0 |
Transaction costs | 4,587 | 0 | 0 |
Related party expense allocations | 2,529 | 727 | 816 |
Non-related party expenses | 3,003 | 714 | 504 |
Total expenses | 785,943 | 280,085 | 170,987 |
Income before taxes | 100,552 | 7,412 | 3,742 |
Provision for income taxes | 2,202 | 0 | 0 |
Net income | 98,350 | 7,412 | 3,742 |
Less: net income attributable to non-controlling interests | 95,749 | 7,412 | 3,742 |
Net income attributable to RCS Capital Corporation | $2,601 | $0 | $0 |
Per Share Data | ' | ' | ' |
Basic and diluted number of shares attributable to Class A stockholders | 2,500,000 | ' | ' |
Net income per share attributable to RCS Capital Corporation | $1.04 | ' | ' |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income Statement (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $98,350 | $7,412 | $3,742 |
Other comprehensive loss, net of tax: | ' | ' | ' |
Unrealized loss on available-for-sale securities | -489 | 0 | 0 |
Total other comprehensive loss, net of tax | -489 | 0 | 0 |
Total comprehensive income | 97,861 | 7,412 | 3,742 |
Less: Net comprehensive income attributable to non-controlling interests | 95,306 | 7,412 | 3,742 |
Net comprehensive income attributable to RCS Capital Corporation | $2,555 | $0 | $0 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Unclassified Stock [Member] | Additional Paid-in Capital [Member] | Retained Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Total Stocholder's Equity [Member] | Noncontrolling Interest [Member] | Member's Equity [Member] | Common Class A [Member] | Common Class A [Member] | Common Class B [Member] | Common Class B [Member] | ||
Common Stock [Member] | Common Stock [Member] | |||||||||||||
Beginning Balance at Dec. 31, 2012 | $5,726,000 | ' | ' | ' | ' | ' | ' | $5,726,000 | ' | ' | ' | ' | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Issuance of common stock, shares | [1] | ' | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Distributions | -19,650,000 | ' | ' | ' | ' | ' | ' | -19,650,000 | ' | ' | ' | ' | ||
Net income | 47,454,000 | ' | ' | -165,000 | ' | -165,000 | ' | 47,619,000 | ' | ' | ' | ' | ||
Common stock, par value (in dollars per share) | ' | $0.01 | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Common Stock | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Ending Balance at Jun. 09, 2013 | 33,530,000 | ' | ' | -165,000 | ' | -165,000 | ' | 33,695,000 | ' | ' | ' | ' | ||
Ending Balance, shares at Jun. 09, 2013 | ' | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Beginning Balance at Jun. 10, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Issuance of common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ||
Issuance of common stock | 43,627,000 | ' | 43,624,000 | ' | ' | 43,627,000 | ' | ' | ' | 3,000 | ' | ' | ||
Reorganization, shares | ' | -100 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | -24,000,000 | |
Reorganization | 0 | ' | ' | 165,000 | ' | 189,000 | 33,506,000 | -33,695,000 | ' | ' | ' | 24,000 | ||
Equity-based compensation | 492,000 | ' | ' | ' | ' | ' | 492,000 | ' | ' | ' | ' | ' | ||
Unrealized loss on available-for-sale securities, net of tax | -489,000 | ' | ' | ' | -46,000 | -46,000 | -443,000 | ' | ' | ' | ' | ' | ||
Net income | 50,896,000 | ' | ' | 2,601,000 | ' | 2,601,000 | 48,295,000 | ' | ' | ' | ' | ' | ||
Distributions to non-controlling interests | -47,180,000 | ' | ' | ' | ' | ' | -47,180,000 | ' | ' | ' | ' | ' | ||
Dividends declared on common stock | -1,350,000 | ' | -248,000 | -1,102,000 | ' | -1,350,000 | ' | ' | ' | ' | ' | ' | ||
Common stock, par value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | $0.00 | ' | ||
Common Stock | ' | 1 | ' | ' | ' | ' | ' | ' | 3,000 | ' | 24,000 | ' | ||
Ending Balance at Dec. 31, 2013 | $79,526,000 | ' | $43,376,000 | $1,499,000 | ($46,000) | $44,856,000 | $34,670,000 | ' | ' | $3,000 | ' | $24,000 | ||
Ending Balance, shares at Dec. 31, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | 24,000,000 | ||
[1] | (a) Represents the initial 100 shares of $0.01 par value common stock issued to RCAP Holdings for $100.00, but due to rounding, $1.00 of par value and $99.00 of additional paid-in capital do not appear in the consolidated statement of changes in stockholders' equity. | |||||||||||||
[2] | (b) Represents the reversal of the initial $1.00 aggregate par value common stock and related $99.00 additional paid-in capital. |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | Jun. 09, 2013 | Jun. 09, 2013 | Dec. 31, 2013 | Jun. 09, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Unclassified Stock [Member] | Unclassified Stock [Member] | Additional Paid-in Capital [Member] | Common Class A [Member] | Common Class A [Member] | Common Class A [Member] | Common Class B [Member] | Common Class B [Member] | |||
Common Stock [Member] | ||||||||||
Issuance of common stock, shares | ' | 100 | [1] | ' | ' | ' | ' | 2,500,000 | ' | ' |
Common stock, par value (in dollars per share) | ' | $0.01 | ' | $1 | $0.00 | ' | ' | $0.00 | ' | |
Common Stock | $100 | ' | $1 | ' | $3,000 | $0 | ' | $24,000 | $0 | |
[1] | (a) Represents the initial 100 shares of $0.01 par value common stock issued to RCAP Holdings for $100.00, but due to rounding, $1.00 of par value and $99.00 of additional paid-in capital do not appear in the consolidated statement of changes in stockholders' equity. |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $98,350 | $7,412 | $3,742 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation | 150 | 31 | 12 |
Equity-based compensation | 492 | 0 | 0 |
Deferred income taxes | -126 | 0 | 0 |
Loss on the sale of available-for-sale securities | 59 | 0 | 0 |
Deferred income tax on the unrealized loss of available-for-sale securities | 21 | 0 | 0 |
Change in fair value of investment securities | 138 | 0 | 0 |
Loss on investment | ' | 0 | 300 |
Selling commissions and dealer manager fees: | ' | ' | ' |
Due from related parties | 104 | -1,024 | 120 |
Due from non-related parties | 158 | -96 | 250 |
Reimbursable expenses: | ' | ' | ' |
Due from related parties | -17,282 | -1,011 | 1,450 |
Due from non-related parties | -523 | -33 | 161 |
Investment banking fees (related party) | -21,420 | 0 | 0 |
Loan receivable | 0 | 77 | -17 |
Due from RCAP Holdings and related parties | -7,156 | 0 | 0 |
Prepaid expenses and other assets | -863 | 99 | -396 |
Accounts payable | 3,392 | 902 | 17 |
Due from related parties | 16,736 | 0 | 0 |
Due from related parties | 1,719 | 2,887 | 11 |
Payable to broker-dealers | -3,748 | 4,158 | -1,814 |
Deferred revenue (related party) | 2,567 | 0 | 0 |
Net cash provided by operating activities | 72,768 | 13,402 | 3,836 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of available-for-sale securities | -10,097 | 0 | 0 |
Proceeds from the sale of available-for-sale securities | 1,000 | 0 | 0 |
Purchases of investment securities | -6,012 | 0 | 0 |
Purchase of property and equipment | -495 | -106 | -11 |
Net cash used in investing activities | -15,604 | -106 | -11 |
Cash flows from financing activities: | ' | ' | ' |
Proceeds from issuance of common stock | 50,000 | 0 | 0 |
Payments of offering costs and fees related to the stock issuance | -6,373 | 0 | 0 |
Contributions | 0 | 3,646 | 9,519 |
Distributions to non-controlling interest holders | -47,180 | 0 | 0 |
Distributions to members | -19,650 | -8,200 | -13,560 |
Dividends paid | -900 | 0 | 0 |
Net cash used in financing activities | -24,103 | -4,554 | -4,041 |
Net increase (decrease) in cash | 33,061 | 8,742 | -216 |
Cash and cash equivalents, beginning of period | 12,683 | 3,941 | 4,157 |
Cash and cash equivalents, end of period | 45,744 | 12,683 | 3,941 |
Supplemental disclosures: | ' | ' | ' |
Income Taxes Paid | 133 | 0 | 0 |
Dividends declared but not yet paid | $450 | $0 | $0 |
Organization_and_Description_o
Organization and Description of the Company | 12 Months Ended | |
Dec. 31, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Organization and Description of the Company | ' | |
Organization and Description of the Company | ||
RCS Capital Corporation (the "Company") is a holding company incorporated under the laws of the State of Delaware on December 27, 2012, originally named 405 Holding Corporation. On February 19, 2013, 405 Holding Corporation changed its name to RCS Capital Corporation. The Company was formed to hold the following subsidiaries (together known as the "Operating Subsidiaries") and to grow business lines under such Operating Subsidiaries: | ||
• | Realty Capital Securities, LLC ("Realty Capital Securities"), a wholesale broker-dealer registered with the U.S. Securities and Exchange Commission (the "SEC") and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). Realty Capital Securities also provides investment banking advisory services and capital markets services; | |
• | RCS Advisory Services, LLC ("RCS Advisory"), a transaction management services business, and its newly formed wholly owned subsidiaries, Scotland Acquisition, LLC, Zoe Acquisition, LLC and Dolphin Acquisition, LLC; and | |
• | American National Stock Transfer, LLC ("ANST"), an SEC-registered transfer agent. | |
On June 10, 2013, the Company closed its initial public offering (the "IPO”) of Class A common stock, par value $0.001 per share, in which it sold 2,500,000 Class A shares at $20.00 per share, resulting in net proceeds after offering costs and underwriting discounts and commissions of $43.6 million. Concurrently with the closing of the IPO on June 10, 2013, the Company underwent a reorganization, in which RCAP Holdings, LLC ("RCAP Holdings”) received 24,000,000 Class B shares, par value $0.001 per share, in exchange for 100 unclassified shares in the Company previously purchased by RCAP Holdings. | ||
Concurrently with the commencement of the IPO, the Operating Subsidiaries also underwent a reorganization, in which a new class of operating subsidiary units called "Class A Units," which entitle the holders thereof to voting and economic rights, were issued to the Company, and a new class of operating subsidiary units called "Class B Units," which entitle the holder thereof to economic rights but not voting rights, were issued to RCAP Holdings. Also created were "Class C Units" and "LTIP Units." After the subsidiary reorganization and IPO, through their ownership of Class A and Class B units, the Company owned a 9.4% economic interest in the Operating Subsidiaries and RCAP Holdings owned a 90.6% economic interest in the Operating Subsidiaries. Prior to the reorganization and IPO, RCAP Holdings held a 100% interest in each of the Operating Subsidiaries and the Company. | ||
Upon completion of the reorganization and the IPO, the Company became the managing member of the Operating Subsidiaries and the Company assumed the exclusive right to manage and conduct the business and affairs of the Operating Subsidiaries and to take any and all actions on their behalf in such capacity. As a result, the Company consolidates the financial results of the Operating Subsidiaries with its own financial results. Net profits and net losses of the Operating Subsidiaries are allocated to their members pro rata in accordance with the respective percentages of their membership interests in the Operating Subsidiaries. Because the Company and the Operating Subsidiaries were under common control at the time of reorganization, the Company's acquisition of control of the Operating Subsidiaries was accounted for at historical cost in the accompanying consolidated financial statements. Accordingly, the operating results of the Operating Subsidiaries have been included in the Company’s consolidated financial statements from the date of common control. | ||
Realty Capital Securities, a limited liability company organized in Delaware, is the securities broker-dealer for proprietary products sponsored by AR Capital, LLC (an affiliate) and its affiliates, consisting primarily of non-traded real estate investment trusts ("REITs"), as well as a closed-end real estate securities fund, an open-end real estate securities fund and a non-traded business development company fund and, from time to time, programs not sponsored by AR Capital, LLC. Realty Capital Securities also provides investment banking advisory services and capital markets services to related and non-related party issuers of public securities in connection with strategic alternatives related to potential liquidity events and other transactions. Realty Capital Securities markets securities throughout the United States by means of a national network of selling group members consisting of unaffiliated broker-dealers and their registered representatives. | ||
RCS Advisory was organized in Delaware in December 2012 as a limited liability company and commenced operations in January 2013. RCS Advisory provides a range of services to alternative investment programs and other investment vehicles, including offering registration and blue sky filings advice with respect to SEC and FINRA registration maintenance, transaction management, marketing support, due diligence advice and related meetings, events, training and education, conference management and strategic advice in connection with liquidity events and other strategic transactions. | ||
ANST was organized in Delaware in November 2012 as a limited liability company and commenced operations in January 2013 as a transfer agent. ANST acts as a registrar, provides record-keeping services and executes the transfer, issuance and cancellation of shares or other securities in connection with offerings conducted by issuers sponsored directly or indirectly by AR Capital, LLC, effective March 1, 2013. ANST provides transfer agency services through third-party service providers. | ||
Pending Acquisitions | ||
During the fourth quarter of the year ended December 31, 2013 the Company entered into agreements with respect to the following acquisitions: | ||
Hatteras Funds Group ("Hatteras"): | ||
Hatteras is a private company that is the sponsor of, investment advisor to and distributor for the Hatteras Funds complex, a family of alternative investment funds registered as investment companies with the SEC. | ||
On October 1, 2013, the Company entered into a purchase agreement with Hatteras. Pursuant to the terms and subject to the conditions set forth in the purchase agreement, a wholly owned subsidiary of the Company will purchase substantially all the assets related to the business and operations of Hatteras and assume certain liabilities of Hatteras. | ||
The aggregate estimated consideration to be paid is $40.0 million in cash, subject to certain adjustments, and an earn-out. | ||
Investors Capital Holdings, Ltd. ("ICH"): | ||
ICH is a public company with its common stock listed on the NYSE MKT (formerly the American Stock Exchange) under the symbol “ICH” that provides broker-dealer services to investors in support of trading and investment in securities, alternative investments and variable life insurance as well as investment advisory and asset management services. | ||
On October 27, 2013, the Company entered into a merger agreement with ICH. Pursuant to the terms and subject to the conditions set forth in the merger agreement, a wholly owned subsidiary of the Company will merge with and into ICH, with ICH surviving the merger as a subsidiary of the Company. | ||
The aggregate estimated consideration to be paid is $52.5 million, of which no more than 60% will be in cash and no less than 40% will be in shares of the Company's Class A common stock, subject to the election of holders of ICH common stock to receive either cash or stock. | ||
Summit Financial Services Group ("Summit"): | ||
Summit is a public company with its common stock listed on the OTC Markets Group, Inc. under the symbol “SFNS” that has financial advisors providing securities brokerage and investment retail advice in the United States. | ||
On November 16, 2013, the Company entered into a merger agreement with Summit. Pursuant to the terms and subject to the conditions set forth in the merger agreement, Summit will merge with and into a wholly owned subsidiary of the Company, with the subsidiary surviving the merger with the same corporate name as Summit. | ||
The aggregate estimated consideration to be paid is $49.0 million, of which no more than 80% will be in cash and no less than 20% will be in shares of the Company's Class A common stock. | ||
Subsequent to December 31, 2013 the Company announced several additional transactions. See Note 13. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Summary of Significant Accounting Policies | ' | |
Summary of Significant Accounting Policies | ||
Basis of Presentation | ||
The consolidated financial statements include the accounts of the Company, Realty Capital Securities, RCS Advisory and ANST. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’) and Article 8 of Regulation S-X. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results. The statements of income for the years ended December 31, 2012 and 2011 represent the results of operations of Realty Capital Securities, the only Operating Subsidiary in operation during the period. The statement of financial condition as of December 31, 2012 was derived from the Realty Capital Securities audited financial statements at that date (since it was the only Operating Subsidiary that was operational at that date). | ||
Use of Estimates | ||
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates, and these differences could be material. | ||
Cash and cash equivalents | ||
Cash and cash equivalents include all highly liquid instruments purchased with original maturities of 90 days or less. | ||
Available-for-sale Securities | ||
Available-for-sale securities represent investments by RCS Advisory in an equity mutual fund managed by a related party, which consist of shares of AR Capital Real Estate Income Fund. RCS Advisory treats these securities as available-for-sale securities with unrealized gains (losses) recorded in accumulated other comprehensive income (loss) and realized gains (losses) recorded in earnings. See Notes 4 and 5. | ||
Investment Securities | ||
Investment securities represent investments by Realty Capital Securities in an equity mutual fund managed by a related party, which consist of shares of AR Capital Real Estate Income Fund. Realty Capital Securities records both realized and unrealized gains (losses) in earnings on this investment, due to the fact that it is a broker-dealer. See Note 5. | ||
Receivables | ||
Receivables represent selling commission receivables and dealer manager receivables due from related party and non-related party entities in connection with the distribution of programs sponsored by an affiliate, AR Capital, LLC, and other sponsors. See “Selling Commissions and Dealer Manager Fees”. | ||
Reimbursable Expenses and Investment Banking Fees | ||
Reimbursable expenses and investment banking fees represent fees receivable for services provided to related parties and non-related party entities related to investment banking, capital markets and related advisory services performed. See “Investment Banking Advisory Services” and “Reimbursable Expenses”. | ||
Revenue Recognition | ||
The Company recognizes revenue generally when it is earned and realized or realizable, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. | ||
Selling Commissions and Dealer Manager Fees | ||
Realty Capital Securities receives selling commissions and dealer manager fees in connection with the distribution of programs sponsored by AR Capital, LLC and other non-related party sponsors. The selling commission and dealer manager fee rates are established jointly in a single contract entered into with each individual issuer. As the dealer manager for, or distributor of offerings, Realty Capital Securities generally receives selling commissions of up to 7.0% of gross offering proceeds for funds raised through the participating independent broker-dealer channel, which commissions are then redistributed to those third-party selling group participants who are FINRA member firms. Realty Capital Securities generally receives dealer manager fees of 3.0% of gross offering proceeds for funds raised, a portion of which may be redistributed to those third-party selling group participants who are FINRA member firms. Realty Capital Securities has discretion as to the reallowance of dealer manager fees to participating broker-dealers, based on such factors as the volume of shares sold and marketing support costs incurred by respective selling group members. Selling commission and dealer manager fee revenues and related expenses are recorded on a trade date basis as securities transactions occur. | ||
The Company analyzes its contractual arrangements to determine whether to report revenue on a gross basis or a net basis. The analysis considers multiple indicators regarding the services provided to their customers and the services received from suppliers. The goal of the analysis is to determine which entity is the primary obligor in the arrangement. After weighing many indicators, including Realty Capital Securities' position as the exclusive distributor or dealer manager primarily responsible for the distribution of its customers’ shares, its discretion in supplier selection, that Realty Capital Securities’ suppliers bear no credit risk and that the commission and dealer manager fee rates are established jointly in a single contract, Realty Capital Securities concluded that the gross basis of accounting for its commission and fee revenues is appropriate. | ||
Realty Capital Securities, serving as a dealer manager, receives fees and compensation in connection with the wholesale distribution of securities. Realty Capital Securities works with independent broker-dealers to solicit share subscriptions from their clients. The securities are offered on a "best efforts" or "reasonable best efforts" basis and Realty Capital Securities is not obligated to underwrite or purchase any shares for its own account. | ||
Investment Banking Advisory Services | ||
The Company, through its investment banking and capital markets division, receives fees and compensation for providing investment banking, capital markets and related advisory services. Such fees are charged based on agreements entered into with related party and non-related party public and private issuers of securities and their sponsors and advisors, on a negotiated basis. Fees and expenses that are unpaid are recorded in investment banking fees receivable and reimbursable expenses in the statement of financial condition. Income from investment banking agreements that are not deferred is recognized when the transactions are complete or the services have been performed. Income from certain investment banking agreements is recorded in deferred revenue in the statement of financial condition and is recognized over the remaining life of the offering, which normally ranges from 3 to 26 months. | ||
Transfer Agency Revenue | ||
ANST receives fees for providing transfer agency and related services. Such fees are charged based on agreements entered into with related party issuers of securities on a negotiated basis. Certain fees are billed and recorded monthly based on account activity, such as new account establishment fees and call fees. Other fees, such as account maintenance fees, are billed and recorded monthly. | ||
Services Revenue | ||
The Company receives fees for providing transaction management, marketing support, due diligence advice, events, training and education, conference management and strategic advice. Such fees are charged at hourly billing rates for the services provided, based on agreements entered into with related party issuers of securities on a negotiated basis. Such fees are billed and recorded monthly based on services rendered. | ||
Reimbursable Expenses | ||
The Company includes all reimbursable expenses in gross revenue because the Company as the primary obligor has discretion in selecting a supplier, and bears the credit risk of paying the supplier prior to receiving reimbursement from the customer. | ||
Marketing and Advertising | ||
The Company expenses the cost of marketing and advertising as incurred. | ||
Income Taxes | ||
The Company files standalone federal and state income tax returns. Realty Capital Securities, ANST and RCS Advisory are treated as disregarded entities up to the date of reorganization (June 10, 2013) and as partnerships for federal and state income tax purposes thereafter. All income and expense earned by Realty Capital Securities, ANST and RCS Advisory flows through to their owner through the date of reorganization and to their partners (which includes the Company who is a 9.4% owner of these partnerships) thereafter. Income tax expense from operations and investments of Realty Capital Securities, ANST and RCS Advisory is not incurred by Realty Capital Securities, ANST and RCS Advisory but is reported by their owner through the date of reorganization and by their partners thereafter. | ||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards which relate to the Company's investment in the Operating Subsidiaries. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Current tax liabilities or assets are recognized for the estimated taxes payable or refundable on tax returns for the current year. | ||
A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. This determination is based upon a review of all available evidence, both positive and negative, including the Company's earnings history, the timing, character and amount of future earnings potential, the reversal of taxable temporary differences and the tax planning strategies available. | ||
The Company has adopted the authoritative guidance within ASC 740 relating to accounting for uncertainty in income taxes. The guidance prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken by the Company. See Note 6. | ||
Reportable Segments | ||
The Company’s internal reporting is organized into four segments through its three Operating Subsidiaries, as follows: | ||
• | Realty Capital Securities, under two business lines: | |
◦ | Wholesale Broker-Dealer; and | |
◦ | Investment Banking and Capital Markets | |
• | RCS Advisory providing transaction management services | |
• | ANST providing transfer agency services | |
Recently Issued Accounting Pronouncements | ||
The Company is not aware of any recently issued, but not yet effective, accounting pronouncements that would have a significant impact on the Company's consolidated financial position or results of operations. |
OffBalance_Sheet_Risk_and_Conc
Off-Balance Sheet Risk and Concentrations | 12 Months Ended |
Dec. 31, 2013 | |
Risks and Uncertainties [Abstract] | ' |
Off-Balance Sheet Risk and Concentrations | ' |
Off-Balance Sheet Risk and Concentrations | |
The Company is engaged in various trading, brokerage activities and capital raising with counterparties primarily including broker-dealers, banks, direct investment programs and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty. It is the Company’s policy to review, as necessary, the credit standing of each counterparty. As of December 31, 2013, the Company had 63% of the reimbursable expenses, investment banking fees, services fees and transfer agent fees receivable concentrated in one related party direct investment program, and 93% of the total commissions and dealer manager fees receivable concentrated in three related party direct investment programs. | |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and temporary cash investments in bank deposit and other accounts, the balances of which, at times, may exceed federally insured limits. Exposure to credit risk is reduced by maintaining the Company’s banking and brokerage relationships with high credit quality financial institutions. | |
RCS Advisory and Realty Capital Securities hold securities consisting of investments in a mutual fund managed by a related party that can potentially subject the Company to market risk. The amount of potential gain or loss depends on the fund's performance and overall market activity. RCS Advisory and Realty Capital Securities monitor the net asset value on a monthly basis to evaluate its positions, and, if applicable, may elect to sell all or a portion of the investments to limit the loss. |
AvailableforSale_Securities
Available-for-Sale Securities | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||||||||||
Available-for-Sale Securities | ' | |||||||||||||||||||||||
Available-for-Sale Securities | ||||||||||||||||||||||||
The following table presents information about the Company's available-for-sale securities as of December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||
Purchases | Sales | Realized Loss | Unrealized Losses(1) | Fair Value | Cost | |||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Mutual funds | $ | 10,097 | $ | 1,000 | $ | 59 | $ | 510 | $ | 8,528 | $ | 9,038 | ||||||||||||
_____________________________ | ||||||||||||||||||||||||
(1) Excludes the deferred income tax benefit. | ||||||||||||||||||||||||
The Company had no available-for-sale securities as of or during the year ended December 31, 2012. |
Fair_Value_Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Disclosures [Abstract] | ' |
Fair Value Disclosures | ' |
Fair Value Disclosures | |
The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP defines three levels of inputs that may be used to measure fair value: | |
Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date | |
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability | |
Level 3 - Unobservable inputs that reflect the entity's own assumptions about the data inputs that market participants would use in the pricing of the asset or liability and are consequently not based on market activity | |
The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is the most significant to the fair value measurement in its entirety. | |
The Company's available-for-sale and investment securities trade in active markets and therefore, due to the availability of quoted market prices in active markets are classified as Level 1 in the fair value hierarchy. As of December 31, 2013, the fair value of the available-for-sale and investment securities were $8.5 million and $5.9 million, respectively. As of December 31, 2012, the Company had no available-for-sale or investment securities. | |
A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the year ended December 31, 2013. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Income Taxes | ' | |||||||||||
Income Taxes | ||||||||||||
During the years ended December 31, 2012 and 2011, Realty Capital Securities was the only one of the Company's operating subsidiaries that was in operation. As a limited liability company it was not subject to income taxes, accordingly, Realty Capital Securities did not record income tax expense (benefit). | ||||||||||||
The components of income tax expense/(benefit) included in the consolidated statements of income for the years ended December 31, 2013, 2012 and 2011 were as follows (dollars in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Current income tax expense | ||||||||||||
U.S. Federal | $ | 1,630 | $ | — | $ | — | ||||||
State and local | 677 | — | — | |||||||||
Total current income tax expense | 2,307 | — | — | |||||||||
Deferred income tax benefit | ||||||||||||
U.S. Federal | (85 | ) | — | — | ||||||||
State and local | (20 | ) | — | — | ||||||||
Total deferred income tax benefit | (105 | ) | — | — | ||||||||
Total income tax expense | $ | 2,202 | $ | — | $ | — | ||||||
The reconciliation of the U.S. federal statutory income tax rate to the Company's effective tax rate for the years ended December 31, 2013, 2012 and 2011 were as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
U.S. federal statutory income tax rate | 35 | % | — | % | — | % | ||||||
Increase (decrease) in tax rate resulting from: | ||||||||||||
State and local income taxes net of federal benefit | 0.42 | % | — | % | — | % | ||||||
Non-controlling interests | (33.40 | )% | — | % | — | % | ||||||
Other | 0.18 | % | — | % | — | % | ||||||
Effective tax rate | 2.2 | % | — | % | — | % | ||||||
Deferred income tax expense (benefits) result from differences between assets and liabilities measured for financial reporting purposes versus income tax return purposes. Deferred income tax assets are recognized if, in the Company's judgment, their realizability is determined to be more likely than not. If a deferred tax asset is determined to be unrealizable, the Company records a valuation allowance. The Company had no deferred tax liabilities as of December 31, 2013 and 2012. The components of the deferred income taxes as of December 31, 2013 and 2012 were as follows (dollars in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Deferred tax assets | ||||||||||||
Other | $ | 1 | $ | — | ||||||||
Unrealized loss on available-for-sale securities(1) | 21 | — | ||||||||||
Deferred revenue | 104 | — | ||||||||||
Total deferred tax assets | $ | 126 | $ | — | ||||||||
_____________________________ | ||||||||||||
(1) Included in other comprehensive income. | ||||||||||||
The Company believes that, as of December 31, 2013, it had no material uncertain tax positions. Interest and penalties relating to unrecognized tax expenses (benefits) are recognized in income tax expense, when applicable. There was no liability for interest or penalties accrued as of December 31, 2013. | ||||||||||||
The Company files tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is open to audit under the statute of limitations by the Internal Revenue Service for 2013. The Company or its subsidiaries' federal and state income tax returns are open to audit under the statute of limitations for 2010 to 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Commitments and Contingencies | ' | |||
Commitments and Contingencies | ||||
Leases — Realty Capital Securities leases certain office space and equipment under various operating leases. These leases are generally subject to scheduled base rent and maintenance cost increases, which are recognized on a straight-line basis over the period of the leases. Total rent expense for all operating leases was approximately $0.4 million, $0.3 million and $0.3 million for the years ended December 31, 2013, 2012 and 2011 respectively. Future annual minimum rental payments due are as follows (in thousands): | ||||
Year Ended December 31, | Amount | |||
2014 | $ | 296 | ||
2015 | 196 | |||
2016 | 100 | |||
$ | 592 | |||
Legal Proceedings — The Company and the Operating Subsidiaries are involved in legal proceedings from time to time arising out of their business operations, including arbitrations and lawsuits involving private claimants, and subpoenas, investigations and other actions by government authorities and self-regulatory organizations. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, the Company cannot predict with certainty what the eventual loss or range of loss related to such matters will be. The Company recognizes a liability with regard to a legal proceeding when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, however, the Company accrues the minimum amount in the range. The Company maintains insurance coverage, including general liability, errors and omissions, excess entity errors and omissions and fidelity bond insurance. The Company records legal reserves and related insurance recoveries on a gross basis. Other than noted below, there were no legal reserves or payments recorded for this period. | ||||
In April 2013, Realty Capital Securities received notice and a proposed Letter of Acceptance, Waiver and Consent ("AWC") from FINRA that certain violations of SEC and FINRA rules, including Rule 10b-9 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and FINRA Rule 2010, occurred in connection with its activities as a co-dealer manager for a public offering. Without admitting or denying the findings, Realty Capital Securities submitted an AWC, which FINRA accepted on June 4, 2013. In connection with the AWC, Realty Capital Securities consented to the imposition of a censure and a fine of $0.06 million, paid in the second quarter of 2013. Realty Capital Securities believes that the matter will not have a material adverse effect on Realty Capital Securities or its business. | ||||
Defense costs with regard to legal proceedings are expensed as incurred and classified as professional services within the consolidated statements of income. When there is indemnification or insurance, the Company may engage in defense or settlement and subsequently seek reimbursement for such matters. | ||||
Summit Litigation | ||||
Summit, its board of directors, the Company and a wholly owned subsidiary formed by the Company in connection with the Summit merger are named as defendants in two purported class action lawsuits (now consolidated) filed by alleged Summit shareholders on November 27, 2013 and December 12, 2013 in Palm Beach County, Florida challenging the Summit merger. These lawsuits allege, among other things, that: (1) each member of Summit’s board of directors breached his fiduciary duties to Summit and its shareholders in authorizing the Summit merger; (2) the Summit merger does not maximize value to Summit shareholders; and (3) the defendants aided and abetted the breaches of fiduciary duty allegedly committed by the members of Summit’s board of directors. These shareholder lawsuits seek class action certification and equitable relief, including an injunction against consummation of the Summit merger on the agreed-upon terms. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity Disclosure [Abstract] | ' |
Stockholders' Equity | ' |
Stockholders' Equity | |
The Company has two classes of common stock: | |
Class A Common Stock. 2,500,000 shares of Class A common stock were issued to the public in the IPO. Class A common stock entitles holders to one vote per share and full economic rights (including rights to dividends, if any, and distributions upon liquidation). Holders of Class A common stock hold 100% of the economic rights and a portion of the voting rights of the Company. | |
On June 13, 2013, the Company's Board of Directors authorized and the Company declared an annual dividend rate of $0.72 per share of Class A common stock or an annual dividend rate of 3.6% based on the Class A common stock price in the IPO of $20.00, which is equal to a quarterly dividend of $0.18 per share. The dividend is payable in cash quarterly, beginning in July 2013, on the seventh business day of each quarter, in respect of the previous quarter, to stockholders of record at the close of business on the last business day of the previous quarter. | |
On June 14, 2013, the Company’s Board of Directors authorized and the Company declared its first quarterly cash dividend for its Class A common stock. The cash dividend was paid on July 10, 2013 to record holders of the Company’s Class A common stock at the close of business on June 28, 2013 in an amount equal to $0.18 per share. | |
On September 18, 2013, the Company’s Board of Directors authorized and the Company declared a cash dividend for the third quarter of 2013 for its Class A common stock. The cash dividend was paid on October 9, 2013 to record holders of the Company’s Class A common stock at the close of business on September 30, 2013 in an amount equal to $0.18 per share, consistent with the cash dividend declared and paid with respect to the second quarter of 2013. | |
On December 23, 2013, the Company’s Board of Directors authorized and the Company declared a cash dividend for the fourth quarter of 2013 for its Class A common stock. The cash dividend was paid on January 10, 2014 to record holders of the Company’s Class A common stock at the close of business on December 31, 2013 in an amount equal to $0.18 per share, consistent with the cash dividend declared and paid with respect to the third quarter of 2013. | |
Class B Common Stock. As of December 31, 2013 RCAP Holdings owns 24,000,000 Class B Units of each operating subsidiary and 24,000,000 shares of the Company’s Class B common stock. As of December 31, 2013, Class B common stock entitles holders to four votes per share; provided, however, that the Company’s certificate of incorporation provides that so long as any of the Class B common stock remains outstanding, the holders of Class B common stock always will have a majority of the voting power of the Company’s outstanding common stock, and thereby control the Company. Class B common stock holders have no economic rights (including no rights to dividends and distributions upon liquidation). Immediately following the conversion from 100 unclassified shares, RCAP Holdings, as holder of Class B common stock, held 0% of the economic rights and the majority of the voting rights of the Company. | |
Equity Plan. The RCS Capital Corporation Equity Plan provides for the grant of stock options, restricted shares of Class A common stock, restricted stock units, dividend equivalent rights and other equity-based awards to RCS Capital Management, LLC ("RCS Capital Management"), included under the Outperformance Agreement, non-executive directors, officers and other employees and independent contractors, including employees or directors of RCS Capital Management and its affiliates who are providing services to the Company. RCS Capital Management is an entity under common control with RCAP Holdings. The maximum number of shares of Class A common stock that may be granted pursuant to awards under the equity plan was initially 250,000 shares of Class A common stock. Following any increase in the number of issued and outstanding shares of Class A common stock, the maximum number of shares of Class A common stock that may be granted pursuant to awards under the equity plan will be a number of shares of Class A common stock equal to the greater of (x) 250,000 shares and (y) 10% of the total number of issued and outstanding shares of Class A common stock (on a diluted basis) at any time following such increase (subject to the registration of the increased number of available shares). |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Earnings Per Share | ' | |||||||||||
Earnings Per Share | ||||||||||||
Basic earnings per share is computed by dividing net income available to Class A common stockholders by the weighted average number of shares of Class A common stock outstanding during the period. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased to include the number of additional shares of Class A common stock that would have been outstanding if potentially dilutive shares of Class A common stock had been issued. The following table presents the calculation of basic and dilutive earnings per share for the years ended December 31, 2013, 2012 and 2011(amounts in thousands): | ||||||||||||
Year Ended | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Earnings for basic and diluted earnings per common Class A share: | ||||||||||||
Net income | $ | 98,350 | $ | 7,412 | $ | 3,742 | ||||||
Net income attributable to non-controlling interests | 95,749 | 7,412 | 3,742 | |||||||||
Net income attributable to common stockholders | $ | 2,601 | $ | — | $ | — | ||||||
Shares: | ||||||||||||
Average Class A shares used in basic and diluted computation(1) | 2,500,000 | N/A | N/A | |||||||||
Earnings per common Class A share | ||||||||||||
Basic and diluted | $ | 1.04 | N/A | N/A | ||||||||
_____________________ | ||||||||||||
(1) Reflects the 2,500,000 shares of Class A common stock offered in the IPO. Shares of Class B common stock were subject to a lockup pursuant to an agreement with the underwriter in connection with the IPO. The lock up period expired during the 3 months ended December 31, 2013; however, these shares were excluded from the computation of diluted net income per share computation because they were anti-dilutive. |
Net_Capital_Requirements
Net Capital Requirements | 12 Months Ended |
Dec. 31, 2013 | |
Net Capital Requirements [Abstract] | ' |
Net Capital Requirements | ' |
Net Capital Requirements | |
Realty Capital Securities is subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital of the greater of $100,000 or 1/15th of aggregate indebtedness, as defined, and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As of December 31, 2013, Realty Capital Securities had net capital of $25.6 million which was $24.3 million in excess of its required net capital, and aggregate indebtedness to net capital ratio was 0.76 to 1. As of December 31, 2012, Realty Capital Securities had net capital of $3.4 million which was $2.7 million in excess of its required net capital, and aggregate indebtedness to net capital ratio was 3.07 to 1. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Related Party Transactions | |
A significant portion of the Company’s revenues relate to fees earned from transactions with or on behalf of AR Capital, LLC and its affiliates, including investment banking fees, services fees, transfer agent fees and wholesale broker-dealer commissions and concessions, in the ordinary course of its trade or business. The Company earned revenues of $713.5 million, $257.3 million and $140.8 million for the years ended December 31, 2013, 2012 and 2011, respectively, from related party products. The receivables for such revenues were $48.4 million and $2.7 million as of December 31, 2013 and 2012, respectively. The Company incurred expenses directly from business activities related to related party products of $465.6 million, $185.8 million and $94.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. The payables to related parties were $16.7 million as of December 31, 2013. The company did not have any payables to related parties as of December 31, 2012. | |
The Operating Subsidiaries were initially capitalized and funded by RCAP Holdings. During the year ended December 31, 2012, Realty Capital Securities received financial support from RCAP Holdings through capital contributions and expense allocation agreements. Through an agreement with an affiliate, Realty Capital Securities was allocated certain operating expenses including occupancy, professional services, communications and data processing, advertising and employee benefits. The total expense allocation for the year ended December 31, 2012, was approximately $0.8 million. | |
Beginning on January 1, 2013, the affiliate expense allocation arrangement was terminated. Pursuant to the new services agreement, AR Capital, LLC charges the Operating Subsidiaries for the services of information technology, human resources, accounting services and office services and facilities. For these services, the Company paid $3.5 million for the year ending December 31, 2013. As of December 31, 2013, the payable for such expenses is $0.3 million. | |
The Company incurs expenses directly for certain services it receives. The Company either allocates these expenses to the Operating Subsidiaries or causes RCAP Holdings to pay its portion based on RCAP Holdings’ ownership interest. Expenses that are directly attributable to a specific Operating Subsidiary are allocated 100% to the appropriate Operating Subsidiary. Expenses that are not specific to an Operating Subsidiary are allocated in proportion to income before taxes, management fees, incentive fees and outperformance fees. The intercompany receivables and payables for these expenses are eliminated in consolidation and are settled quarterly. For the year ended December 31, 2013, the Operating Subsidiaries incurred $2.3 million for such expenses. There were no expenses payable by RCAP Holdings as of December 31, 2013. | |
From time to time, RCAP Holdings may purchase shares of the Company's Class A common stock in the secondary market. As of December 31, 2013, RCAP Holdings owned 2.06% of the Company's Class A common stock outstanding. | |
Management Agreement. Pursuant to the management agreement, RCS Capital Management implements the Company's business strategy, as well as the business strategy of the Operating Subsidiaries, and performs executive and management services for the Company and Operating Subsidiaries, subject to oversight, directly or indirectly, by the Company's Board of Directors. | |
The Company, together with the Operating Subsidiaries, pays RCS Capital Management a management fee in an amount equal to 10% of the aggregate U.S. GAAP net income of the Operating Subsidiaries, calculated and payable quarterly in arrears, subject to the aggregate U.S. GAAP net income of the Operating Subsidiaries being positive for the current and three preceding calendar quarters. | |
In addition, the Company pays RCS Capital Management an incentive fee, calculated and payable quarterly in arrears, that is based on the Company's earnings and stock price. The incentive fee is an amount (if such amount is a positive number) equal to the difference between: (1) the product of (x) 20% and (y) the difference between (i) the Company's Core Earnings, as defined below, for the previous 12-month period, and (ii) the product of (A) the weighted average of the issue price per share of the Company's common stock of all the Company's public offerings multiplied by the weighted average number of all shares of common stock outstanding (including any restricted shares of Class A common stock and any other shares of Class A common stock underlying awards granted under the Company's equity plan) in the previous 12-month period, and (B) 8.0%; and (2) the sum of any incentive fee paid to RCS Capital Management with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive fee is payable with respect to any calendar quarter unless the Company's Core Earnings for the 12 most recently completed calendar quarters is greater than zero. | |
Core Earnings is a non-U.S. GAAP measure and is defined as U.S. GAAP net income (loss) of RCS Capital Corporation, excluding non-cash equity compensation expense, management fees, incentive fees, acquisition fees, depreciation and amortization, any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income. The amount will be adjusted to exclude one-time events pursuant to changes in U.S. GAAP and certain other non-cash charges after discussions between RCS Capital Management and the independent directors and after approval by a majority of the independent directors. | |
Such management and incentive fee calculations commenced on June 10, 2013, the date the offering was completed. For periods less than four quarters or 12 months, the calculations are based on a pro rata concept starting with the quarter ended June 30, 2013. | |
The management fee earned by RCS Capital Management for the period June 10, 2013 (commencement date of the agreement) to December 31, 2013 was $6.0 million, which is the expense recorded by the Company for the year ended December 31, 2013. The payable for such expense is included in accrued expenses - due to related parties within the accompanying consolidated statements of financial condition. | |
The incentive fee earned by RCS Capital Management for the period June 10, 2013 (commencement date of the agreement) to December 31, 2013, was $0.3 million, which is the expense recorded in other expense by the Company for the year ended December 31, 2013. The payable of $0.3 million for such expense is included in accrued expenses - due to related parties within the accompanying consolidated statements of financial condition. | |
2013 Manager Multi-Year Outperformance Agreement. The Company entered into the 2013 Manager Multi-Year Outperformance Agreement (the "OPP"), as of June 10, 2013, with the Operating Subsidiaries and RCS Capital Management. The OPP provides for performance-based bonus awards to RCS Capital Management up to a maximum award opportunity ("OPP Cap") that is 5.00% of the Company's market capitalization on the date of the IPO. The OPP is intended to further align RCS Capital Management’s interests with those of the Company and its stockholders. Under the OPP, RCS Capital Management was granted LTIP Units of the Operating Subsidiaries that were to be allocated among Operating Subsidiaries by the independent directors of the Company based upon any reasonable method as determined in their sole discretion. The LTIP Units represent units of equity ownership in the Operating Subsidiaries that are structured as profits interest therein. Subject to the OPP Cap, the number of LTIP Units earned under the OPP will be determined based on the Company's achievement of total return to stockholders, which is referred to as "Total Return" and which includes both share price appreciation and common stock dividends, as measured against a peer group of companies, for the three-year performance period commencing on the commencement date. | |
Subject to RCS Capital Management's continued service through each vesting date, 1/3 of any LTIP Units earned will vest on each of the third, fourth and fifth anniversaries of the commencement date. Until such time as the LTIP Units are fully earned in accordance with the provisions of the OPP, the LTIP Units are entitled to distributions equal to 10% of the distributions on the Class C Units of the applicable Operating Subsidiary. After the LTIP Units are fully earned, they are entitled to a catch-up distribution and then the same distributions as the Class C Units of the applicable Operating Subsidiary. At the time RCS Capital Management’s capital account with respect to the LTIP Units is economically equivalent to the Class C Units of the applicable Operating Subsidiary, the applicable LTIP Units will automatically convert into Class C Units of the Operating Subsidiary on a one-to-one basis. | |
During the 4th quarter of 2013, The Company determined that the OPP award should be recognized under ASC Topic No. 505, Stock-Based Transactions with Nonemployees, ("ASC 505") rather than ASC Topic No. 718. Compensation - Stock Compensation. The impact of this change was not material for any prior periods. In accordance with ASC 505, the Company recognizes the fair value of the OPP award over the requisite performance period of the award. The award is remeasured at each reporting date and the amortization of the expense is adjusted accordingly. The fair value of the OPP award was determined utilizing a Monte Carlo simulation technique under a risk-neutral premise. The significant assumptions utilized in determining the fair value of $3.3 million as of December 31, 2013, which is expected to be recognized over a period of three years from the grant date were as follows: | |
•Risk free rate of 0.55% utilizing the prevailing 2.4-year zero-coupon U.S. treasury yield at the reporting date; | |
•Expected dividend yield of 3.6%; and | |
•Volatility of 30.0% based on the historical and implied volatility of the peer group of companies | |
For the year ended December 31, 2013 the Company recognized $0.5 million, which is included in other expenses in the consolidated statements of income. | |
RCS Advisory Services, LLC — AR Capital, LLC Services Agreement. RCS Advisory entered into a services agreement with AR Capital, LLC, pursuant to which it provides AR Capital, LLC and its subsidiaries with transaction management services (including, transaction management, compliance, due diligence, event coordination and marketing services, among others), in connection with the performance of services to certain AR Capital, LLC sponsored companies. | |
Registration Rights Agreement. The Company entered into a registration rights agreement with RCAP Holdings and RCS Capital Management pursuant to which the Company will grant (i) RCAP Holdings, its affiliates and certain of its transferees the right, under certain circumstances and subject to certain restrictions, to require the Company to register under the Securities Act shares of its Class A common stock issuable upon exchange of the Operating Subsidiaries Units (and cancellation of corresponding shares of its Class B common stock) held or acquired by them, and (ii) RCS Capital Management, its affiliates and certain of its transferees the right, under certain circumstances and subject to certain restrictions, to require the Company to register under the Securities Act any equity-based awards granted to RCS Capital Management under the equity plan. | |
Exchange Agreement. RCAP Holdings entered into an exchange agreement with the Company under which RCAP Holdings has the right, from time to time, to exchange its Operating Subsidiaries Units for shares of Class A common stock of the Company on a one-for-one basis. Pursuant to the exchange agreement, the parties have agreed to preserve their relative ownership of the Class A common stock, Class B common stock, Class A Units of the Operating Subsidiaries and Class B Units of the Operating Subsidiaries and, accordingly, that the transfer of units of an Operating Subsidiary to a transferee thereof shall be accompanied by the simultaneous transfer of an equal number of the same class, series or type of units of the other Operating Subsidiaries to such transfer. In connection with an exchange, a corresponding number of shares of the Company's Class B common stock will be canceled. Any such exchange by RCAP Holdings will result in dilution of the economic interests of the Company's public stockholders. | |
If RCAP Holdings exchanges its Operating Subsidiaries Units for shares of the Company's Class A common stock, the Company's membership interests in the Operating Subsidiaries will be correspondingly increased and RCAP Holdings' corresponding shares of Class B common stock will be canceled. Because each share of Class B common stock initially will entitle the holder thereof to four votes, whereas each share of Class A common stock offered hereby will entitle the holder thereof to one vote, and because each share of Class A common stock issued to RCAP Holdings upon exchange of its Operating Subsidiaries Units will correspond to the cancellation of one share of Class B common stock held by RCAP Holdings, an exchange of one Operating Subsidiaries Unit for one share of Class A common stock will decrease the voting power of RCAP Holdings by three votes and consequently increase the voting power of the public stockholders; provided, however, that the Company's certificate of incorporation provides that so long as any of its Class B common stock remains outstanding, the holders of its Class B common stock always will have a majority of the voting power of its outstanding common stock, and thereby control the Company. The percentages of voting power in the Company will change accordingly. | |
Amended and Restated Limited Liability Company Agreements of the Operating Subsidiaries. The form of the amended and restated limited liability company agreement of each of the Operating Subsidiaries was filed as an exhibit to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013. The amended and restated operating agreements provide that going forward, any time the Company issues a share of its Class A common stock, the Company will transfer the net proceeds received by it with respect to such share, if any, to the Operating Subsidiaries (allocated among them in accordance with their relative equity values at the time) and each of them shall be required to issue to the Company one Class A Unit. Conversely, if at any time going forward, any shares of its Class A common stock are redeemed by the Company for cash, the Company can cause the Operating Subsidiaries, immediately prior to such redemption of the Company's Class A common stock, to redeem an equal number of Class A Units of each operating subsidiary held by the Company, upon the same aggregate terms and for the same price, as the shares of the Class A common stock are redeemed. | |
American National Stock Transfer, LLC - Transfer Agent Services Agreement. ANST has entered into a services agreement with AR Capital, LLC, pursuant to which it will provide transfer agent services to AR Capital sponsored REITs. The agreement provides for an initial term of ten years. The agreement provides that each REIT must pay a minimum monthly fee as well as additional ad hoc service fees and related expense reimbursements. | |
Tax Receivable Agreement. The Company entered into a tax receivable agreement with RCAP Holdings requiring the Company to pay to RCAP Holdings 85% of the amount of the reduction, if any, in U.S. federal, state and local income tax liabilities that the Company realizes (or is deemed to realize upon early termination of the tax receivable agreement or change of control) as a result of the increases in tax basis of its tangible and intangible assets created by RCAP Holdings' exchanges of its Operating Subsidiaries Units for shares of Class A common stock (with a cancellation of its corresponding shares of the Company's Class B common stock) pursuant to the exchange agreement. Cash payments pursuant to the tax receivable agreement will be the Company's obligation. The initial public offering did not generate tax benefits and did not require payments pursuant to this agreement. In general, the Company's payments under the tax receivable agreement will not be due until after the Company has filed its tax returns for a year in which the Company realizes a tax benefit resulting from an exchange; however, the timing of payments could be accelerated upon an early termination of the tax receivable agreement or change in control which could require payment prior to the Company's ability to claim the tax benefit on its tax returns. Furthermore, RCAP Holdings will not be required to reimburse the Company for any payments previously made under the tax receivable agreement even if the IRS were to successfully challenge the increase in tax basis resulting from an exchange and, as a result, increase the Company's tax liability. The accelerated timing of payments and the increase in the Company's tax liability without reimbursement could affect the cash available to it and could impact its ability to pay dividends. | |
AR Capital Real Estate Income Fund. As of December 31, 2013, RCS Advisory and Realty Capital Securities had investments in the AR Capital Real Estate Income Fund, an equity mutual fund managed by a related party, of $8.5 million and $5.9 million, respectively. As of December 31, 2012, RCS Advisory and Realty Capital Securities had no such investments. |
Segment_Reporting
Segment Reporting | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Segment Reporting | ' | |||||||||||
Segment Reporting | ||||||||||||
The Company operates through its three Operating Subsidiaries in four principal segments: Wholesale Broker-Dealer; Transaction Management; Investment Banking and Capital Markets; and Transfer Agent. Realty Capital Securities, the Company's Wholesale Broker-Dealer segment, includes the Company's alternative investment program activities and is the distributor or dealer manager for proprietary and non-proprietary publicly registered non-exchange traded ("non-traded") securities and for an open-end mutual fund. Proprietary programs are sponsored directly or indirectly by AR Capital, LLC, an affiliate. Realty Capital Securities distributes these securities through selling groups comprised of FINRA member broker-dealers located throughout the United States. | ||||||||||||
Transaction Management is provided by RCS Advisory whose activities support the alternative investment programs distributed by Realty Capital Securities. These activities include: services related to offering registration and blue sky filings; regulatory advice; registration maintenance; transaction management; marketing support; due diligence support; events; training and education; conference management; and strategic advice. | ||||||||||||
The Investment Banking and Capital Markets segment is a division of Realty Capital Securities and includes the Company's strategic advisory and capital markets services focused, in part, on the direct investment program industry. Activities related to the Investment Banking and Capital Markets segment include: corporate strategic planning and advice; and sourcing, structuring and maintaining debt finance and derivative arrangements. | ||||||||||||
ANST operates in the SEC registered Transfer Agent segment and performs transfer agency activities related to the direct investment programs. ANST acts as a registrar, provides record-keeping services and executes the transfers, issuances and cancellations of shares. | ||||||||||||
The reportable business segment information is prepared using the following methodologies: | ||||||||||||
• | Net revenues and expenses directly associated with each reportable business segment are included in determining earnings before taxes. | |||||||||||
• | Net revenues and expenses not directly associated with specific reportable business segments are allocated based on the most relevant measures applicable, including each reportable business segment's net revenues, time spent and other factors. | |||||||||||
• | Reportable business segment assets include an allocation of indirect corporate assets that have been fully allocated to the Company's reportable business segments, generally based on each reportable business segment's capital utilization. | |||||||||||
The following table presents the Company's net revenues, expenses and income before taxes by segment for the years ended December 31, 2013, 2012 and 2011(in thousands): | ||||||||||||
Year Ended | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Wholesale broker-dealer: | ||||||||||||
Revenues | $ | 802,965 | $ | 286,572 | $ | 174,729 | ||||||
Expenses | 757,792 | 280,085 | 170,987 | |||||||||
Income | $ | 45,173 | $ | 6,487 | $ | 3,742 | ||||||
Transaction management: | ||||||||||||
Revenues | $ | 24,367 | $ | — | $ | — | ||||||
Expenses | 14,517 | — | — | |||||||||
Income | $ | 9,850 | $ | — | $ | — | ||||||
Investment banking and capital markets: | ||||||||||||
Revenues | $ | 47,884 | $ | 925 | $ | — | ||||||
Expenses | 5,107 | — | — | |||||||||
Income | $ | 42,777 | $ | 925 | $ | — | ||||||
Transfer agent: | ||||||||||||
Revenues | $ | 12,558 | $ | — | $ | — | ||||||
Expenses | 9,588 | — | — | |||||||||
Income | $ | 2,970 | $ | — | $ | — | ||||||
Revenue reconciliation | ||||||||||||
Total revenues for reportable segments | $ | 887,774 | $ | 287,497 | $ | 174,729 | ||||||
Intercompany revenues | (1,279 | ) | — | — | ||||||||
Total revenues | $ | 886,495 | $ | 287,497 | $ | 174,729 | ||||||
Income reconciliation | ||||||||||||
Total income for reportable segments | $ | 100,770 | $ | 7,412 | $ | 3,742 | ||||||
Corporate and other expenses | (218 | ) | — | — | ||||||||
Income before income taxes | $ | 100,552 | $ | 7,412 | $ | 3,742 | ||||||
The following table presents the Company's total assets by segment as of December 31, 2013 and 2012 (in thousands): | ||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||
Segment assets: | ||||||||||||
Wholesale broker-dealer | $ | 32,058 | $ | 15,286 | ||||||||
Transaction management | 20,211 | — | ||||||||||
Investment banking and capital markets | 46,529 | 925 | ||||||||||
Transfer agent | 8,618 | — | ||||||||||
Total assets for reportable segments | $ | 107,416 | $ | 16,211 | ||||||||
Assets reconciliation: | ||||||||||||
Total assets for reportable segments | $ | 107,416 | $ | 16,211 | ||||||||
Other assets | 3,711 | — | ||||||||||
Total consolidated assets | $ | 111,127 | $ | 16,211 | ||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
Pending Acquisitions | |
Cetera Financial Group ("Cetera") | |
Formed in 2010 through the purchase of three ING Groep N.V., broker-dealers, Cetera Financial Holdings, Inc. ("Cetera") is a financial services holding company that provides independent broker-dealer services and investment retail advice through four distinct independent broker-dealer platforms: Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Financial Institutions LLC and Cetera Financial Specialists LLC. | |
On January 16, 2014, the Company entered into the Cetera merger agreement with Cetera. Pursuant to the terms and subject to the conditions set forth in the Cetera merger agreement, a wholly owned subsidiary of the Company will merge with and into Cetera, with Cetera surviving the merger as the Company's subsidiary. | |
The Company will pay aggregate estimated consideration of $1.15 billion in cash including assumed debt, subject to certain adjustments. In January 2014, the Company paid $55.0 million into escrow related to the purchase of Cetera. If the Cetera merger does not close, the Company may be obligated to pay Cetera a $75 million termination fee. | |
Barclays Commitment Letter | |
Concurrently with the execution of the Cetera merger agreement, the Company, RCS Capital Management, LLC (collectively, the “RCS Companies”), entered into a commitment letter (the “Commitment Letter”) with Barclays Bank PLC (“Barclays”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and Bank of America, N.A. (“Bank of America” and, together with Merrill Lynch and Barclays, the “Commitment Parties”). The Commitment Letter provides for a commitment by Barclays and Bank of America to each provide 50% of (i) a $550.0 million senior secured first lien term loan facility (the “First Lien Term Facility”), (ii) a $25.0 million senior secured first lien revolving credit facility (the “Revolving Facility”) and (iii) a $150.0 million senior secured second lien term loan facility (the “Second Lien Term Facility” and, together with the First Lien Term Facility, the “Term Facilities”). The proceeds of the Term Facilities will be used by the Company to pay a portion of the consideration to be paid in the Cetera Merger, to refinance existing indebtedness of Cetera and the RCS Companies and to pay related fees and expenses. The proceeds of the Revolving Facility will be used following the closing of the Cetera Merger for permitted capital expenditures, to provide for the ongoing working capital requirements of the Company and its subsidiaries following the Cetera merger and for general corporate purposes. The commitments of the Commitment Parties under the Commitment Letter are subject to certain conditions, including potential reductions of the commitments under the First Lien Term Facility if certain pending acquisitions contemplated by the Company are not consummated, the absence of a Company Material Adverse Effect (as defined in the Commitment Letter), the negotiation of definitive documentation, concurrent investments in the borrower of debt or equity from additional investors and other customary closing conditions. | |
Luxor Commitment Letter | |
On January 16, 2014, and in connection with the entry into the Cetera Merger Agreement, the Company and RCAP Holdings entered into a commitment letter (the “Luxor Commitment Letter”) with Luxor Capital Group, LP (“Luxor”). The Luxor Commitment Letter provides for a commitment by Luxor to purchase, subject to modification in certain circumstances as set forth in the Luxor Commitment Letter, (i) $120.0 million of Convertible Notes (the “Convertible Notes”), (ii) $270.0 million of Convertible Preferred Securities (the “Convertible Preferred Securities”) and (iii) up to $50.0 million in common stock (the “Common Stock”, together with the Convertible Notes and the Convertible Preferred Securities, the “Subject Securities”). The Common Stock purchase is subject to the consummation of a follow-on public offering by the Company that satisfies certain minimum proceeds thresholds. Certain of the Subject Securities will be acquired by Luxor at a discount to their face amount, as set forth in the Luxor Commitment Letter. As a condition to entering into the Luxor Commitment Letter, Luxor has the right to designate an independent director to the Board of Directors of the Company. The proceeds from the Luxor Commitment Letter will be used by the Company to pay a portion of the consideration to be paid in the Cetera Merger, to refinance existing indebtedness of Cetera and the RCS Companies and to pay related fees and expenses. The commitments under the Luxor Commitment Letter are subject to certain conditions including the absence of a Company Material Adverse Effect (as defined in the Cetera Merger Agreement) and other customary closing conditions. | |
J.P. Turner & Company, LLC and J.P. Turner & Company Capital Management, LLC (collectively, “J.P. Turner”) | |
J.P. Turner is a retail broker-dealer and investment adviser with a concentration in the southeast United States. J.P. Turner also offers a variety of other investment services, including investment banking. | |
On January 16, 2014, the Company entered into the J.P. Turner purchase agreement with J.P. Turner. Pursuant to the terms and subject to the conditions set forth in the J.P. Turner purchase agreement, a wholly owned subsidiary of the Company will purchase all outstanding membership interests in J.P. Turner held by the sellers. | |
The Company will pay aggregate estimated consideration of $27.0 million, which will be 70% in cash and 30% in shares of the Company's Class A common stock, subject to certain adjustments and earn-outs. | |
First Allied Holdings Inc. ("First Allied") | |
First Allied is an independent broker dealer. | |
Pursuant to a merger agreement dated as of June 5, 2013, among RCAP Holdings, First Allied and the holders of all the equity capital of First Allied, First Allied was acquired by RCAP Holdings on September 25, 2013 for a total cost of $177.0 million, consisting of $145.0 million in merger consideration plus the assumption of $32.0 million of First Allied indebtedness. | |
On February 11, 2014, the Company entered into a non-binding letter of intent with RCAP Holdings to enter into a contribution agreement pursuant to which RCAP Holdings will contribute all its equity interests in First Allied to the Company. As consideration for this contribution, the Company has agreed to issue shares of the Company's Class A common stock to RCAP Holdings representing an amount of $207.5 million in the aggregate, and the Company expects to assume First Allied’s net liabilities upon consummation of the contribution. | |
Amendment to ICH Merger Agreement | |
On February 28, 2014, the ICH merger agreement was amended to, among other things (1) provide that ICH will merge with and into a wholly owned subsidiary of the Company, with the Company's subsidiary surviving the merger with the same corporate name as ICH, (2) provide that the ICH merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and (3) extend the date after which the parties can terminate the ICH merger agreement from April 30, 2014 (subject to extension as set forth in the ICH merger agreement) to July 31, 2014 (without any extension provisions). | |
RCS Capital Corporation Restructuring Transactions | |
On February 11, 2014, the Company entered into certain corporate restructuring transactions (the “Restructuring Transactions”) involving the Company, RCAP Holdings, the Company’s Operating Subsidiaries, and RCS Capital Management. The Company has entered into a series of agreements in connection with the Restructuring Transactions. The Company entered into the Restructuring Transactions to help simplify the Company’s corporate structure as the Company moves ahead with its recently announced acquisitions and related financings and strives to create the second-largest independent financial advice network in the United States. | |
Amendment of Exchange Agreement | |
As an initial step in the Restructuring Transactions, on February 11, 2014, the Company entered into a First Amendment to the Exchange Agreement (the “Amendment”) with RCAP Holdings, the holder of (a) the Class B Units of each of the Operating Subsidiaries (collectively, the “Class B Operating Subsidiary Units”), and (b) all the outstanding shares of the Company’s Class B common stock, par value $0.001 per share (“Class B Common Stock”). The purpose of the Amendment was to amend the Exchange Agreement dated as of June 10, 2013 (as amended by the Amendment, the “Exchange Agreement”), between the Company and RCAP Holdings, so as to permit an exchange by RCAP Holdings of its Class B Operating Subsidiary Units for shares of the Company’s Class A common stock, par value $0.001 per share (“Class A Common Stock”), and the related cancellation of a corresponding number of shares of Class B Common Stock thereunder, to be treated as a contribution by RCAP Holdings of its equity interests in each of the Operating Subsidiaries to the Company in a transaction intending to qualify as tax-free under Section 351 of the United States Internal Revenue Code of 1986, as amended. | |
Exchange | |
On February 11, 2014, as part of the Restructuring Transactions, RCAP Holdings delivered a written notification (the “Exchange Request”) to the Company pursuant to the Exchange Agreement of RCAP Holdings’ election to exchange 23,999,999 Class B Operating Subsidiary Units for 23,999,999 shares of Class A Common Stock. Pursuant to the Exchange Request, the Company and RCAP Holdings waived the obligation under the Exchange Agreement to deliver an exchange notice with respect to the exchange at least 20 days in advance of the closing of the Exchange, as well as provisions in the Exchange Agreement with respect to the timing of the closing of the Exchange, which was consummated on February 11, 2014. | |
The Company issued the Class A Common Stock in the Exchange to RCAP Holdings in reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”). RCAP Holdings was an existing holder of the Class A Common Stock and the Class B Common Stock, and the Company did not, directly or indirectly, pay or give any commission or other remuneration to any party for soliciting the exchange. Pursuant to the Exchange Request, RCAP Holdings also delivered 23,999,999 shares of Class B Common Stock to the Company for cancellation concurrently with the closing of the exchange. | |
After giving effect to the Exchange, as of February 11, 2014, RCAP Holdings holds 24,051,499 shares of Class A Common Stock and one share of Class B Common Stock, which entitles RCAP Holdings, in the aggregate, to 90.76% of the economic rights in the Company and 95.38% of the voting power of the Class A Common Stock and Class B Common Stock voting together as a single class. As a result, RCAP Holdings is entitled to both economic and voting rights and, therefore, no longer has a non-controlling interest in the Operating Subsidiaries of the Company. | |
Equity Plan | |
Following the Exchange, which was consummated on February 11, 2014, and the registration statement on Form S-8 filed with respect to the equity plan on February 19, 2014, as of February 19, 2014, 2,649,999 shares of Class A common stock may be granted pursuant to awards under the equity plan. | |
Formation of RCS Holdings | |
Also in connection with the Restructuring Transactions, the Company formed RCS Capital Holdings, LLC (“RCS Holdings”), a Delaware limited liability company, and, in connection therewith, entered into a Limited Liability Company Agreement of RCS Holdings dated as of February 11, 2014 (the “RCS Holdings LLC Agreement”), between the Company and RCS Capital Management. | |
In connection with the formation of RCS Holdings, on February 11, 2014, (a) the Company entered into a Contribution and Exchange Agreement (the “Contribution and Exchange Agreement”) with RCS Capital Management and RCS Holdings, pursuant to which the Company contributed to RCS Holdings 26,499,999 Class A Units of each of the Operating Subsidiaries (collectively, the “Class A Operating Subsidiary Units”) in exchange for 26,499,999 Class A RCS Holdings Units (as defined below), and (b) RCS Capital Management contributed to RCS Holdings an aggregate of 3,975,000 LTIP Units of the Operating Subsidiaries (the “Operating Subsidiary LTIP Units”) in exchange for 1,325,000 RCS Holdings LTIP Units (as defined below), which RCS Holdings LTIP Units (as defined below) will be subject to the Amended OPP (as defined below). | |
Pursuant to the RCS Holdings LLC Agreement, there are three authorized classes of equity interests in RCS Holdings, designated as “Class A Units” (“Class A RCS Holdings Units”), “Class C Units” (“Class C RCS Holdings Units) and “LTIP Units” (“RCS Holdings LTIP Units”). In connection with the execution of the RCS Holdings LLC Agreement and the Contribution and Exchange Agreement, 100% of the Class A RCS Holdings Units were issued to the Company and 100% of the RCS Holdings LTIP Units were issued to RCS Capital Management. The Class A RCS Holdings Units issued to the Company are fully vested, are not subject to any put and call rights, and entitle the holder thereof to voting and economic rights (including rights to dividends and distributions upon liquidation). The RCS Holdings LTIP Units issued to RCS Capital Management are structured as a profits interest in RCS Holdings with all the rights, privileges and obligations associated with Class A RCS Holdings Units, subject to certain exceptions, and do not have any voting rights. The RCS Holdings LTIP Units are subject to vesting, forfeiture and restrictions on transfers as provided in the Amended OPP (as defined below). Until such time as the RCS Holdings LTIP Units are fully earned in accordance with the provisions of the Amended OPP (as defined below), the RCS Holdings LTIP Units are entitled to distributions equal to 10% of the distributions on Class A RCS Holdings Units. After the RCS Holdings LTIP Units are fully earned they are entitled to a catch-up distribution and then the same distributions as Class A RCS Holdings Units. At the time RCS Capital Management’s capital account with respect to the RCS Holdings LTIP Units is economically equivalent to the Class A RCS Holdings Units, the RCS Holdings LTIP Units will automatically convert into Class C RCS Holdings Units on a one-to-one basis. The Class C RCS Holdings Units have the same economic rights, privileges and obligations associated with Class A RCS Holdings Units, but do not have any voting rights. The Class C RCS Holdings Units will be exchangeable at the holder’s option for shares of Class A Common Stock on a one-to-one basis. Pursuant to the RCS Holdings LLC Agreement, the Company, as the managing member of RCS Holdings, controls RCS Holdings’ affairs and decision making. Consequently, the Company is responsible for all the operational and administrative decisions and day-to-day management of the business of RCS Holdings. | |
Amended and Restated Limited Liability Company Agreements of the Operating Subsidiaries | |
Also in connection with the formation of RCS Holdings, on February 11, 2014, the Company and RCAP Holdings entered into an amendment and restatement of each of the existing limited liability company agreements of the Operating Subsidiaries (collectively, as so amended and restated, the “Operating Subsidiary LLC Agreements”). Pursuant to the Operating Subsidiary LLC Agreements, there are now only two authorized classes of equity interests in each of the Operating Subsidiaries (collectively, the “Operating Subsidiary Units”), designated as “Class A Units” and “Class B Units.” Following the execution of the Operating Subsidiary LLC Agreements, the Operating Subsidiaries no longer have classes of equity interests designated as “Class C Units” or “LTIP Units.” See "Amended and Restated 2013 Multi-Year Outperformance Agreement". | |
Pursuant to the Contribution and Exchange Agreement, 26,499,999, or 100%, of the Class A Operating Subsidiary Units were issued to RCS Holdings. Following the execution of the Operating Subsidiary LLC Agreements, the Class A Operating Subsidiary Units continue to entitle the holder thereof to voting and economic rights (including rights to dividends and distributions upon liquidation). Following the Exchange, one of each, or 100%, of the Class B Operating Subsidiary Units were held by RCAP Holdings. The Class B Operating Subsidiary Unit also continues to entitle the holder thereof to economic rights (including rights to dividends and distributions upon liquidation), but no voting rights; however, as there is only one Class B Operating Subsidiary Unit outstanding, RCAP Holdings has de minimis direct economic rights with respect to the Operating Subsidiaries. | |
Amended and Restated Services Agreement | |
On February 11, 2014, in connection with the Restructuring Transactions, the Company entered into an amendment and restatement of the existing Management Agreement dated as of June 10, 2013, among the Company, the Operating Subsidiaries and RCS Capital Management. Upon the amendment and restatement of such Management Agreement, it is now known as the Amended and Restated Services Agreement (the “Services Agreement”). | |
In the Services Agreement, RCS Holdings was added as a party thereto and service recipient thereunder, and the Operating Subsidiaries are no longer parties thereto but continue to be service recipients thereunder. In connection with such change, the fees payable to RCS Capital Management pursuant to the Services Agreement are now allocated between the Company and RCS Holdings based on any reasonable method determined by the Company’s independent directors, such as the relative value of the services provided during the relevant period or the relative amount of time spent by RCS Capital Management providing management services to RCS Holdings and the Operating Subsidiaries, on the one hand, and the Company, on the other hand. | |
The Services Agreement was also executed in order to clarify the services to be provided to the Company, RCS Holdings and the Operating Subsidiaries on a going-forward basis. In addition, the parties extended the expiration of the initial term of the Services Agreement from June 10, 2023 to June 10, 2033. During the initial term, the Company, together with RCS Holdings, may terminate the Services Agreement only for cause (as defined in the Services Agreement). | |
In addition, the Services Agreement was executed in order to simplify the definition of the “Quarterly Fee” payable to RCS Capital Management and the definition of “Core Earnings” (a component used in calculating the incentive fee payable to RCS Capital Management). Pursuant to the revised definition of the Quarterly Fee, the Company, together with RCS Holdings, pays RCS Capital Management: (a) a quarterly fee in an aggregate amount equal to 10% of the Company’s pre-tax income calculated under U.S. (if such amount is a positive number), calculated and payable quarterly in arrears, subject to the Company’s U.S. GAAP pre-tax income being positive for the current and three preceding calendar quarters. Core Earnings is a non-GAAP measure and is now defined as the after-tax U.S. GAAP net income (loss) of the Company before the incentive fee plus non-cash equity compensation expense, depreciation and amortization, any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income. The amount may be adjusted to include one-time events pursuant to changes in GAAP and certain other non-cash charges after discussions between RCS Capital Management and the Company’s independent directors and after approval by a majority of the Company’s independent directors. The incentive fee is an amount (if such amount is a positive number) equal to the difference between: (1) the product of (x) 20% and (y) the difference between (i) the Company’s Core Earnings, as defined below, for the previous 12-month period, and (ii) the product of (A) (X) the weighted average of the issue price per share (or deemed price per share) of the Company’s common stock of all of the Company’s cash and non-cash issuances of common stock from and after June 5, 2013, multiplied by (Y) the weighted average number of all shares of common stock outstanding (including any restricted shares of Class A common stock and any other shares of Class A common stock underlying awards granted under the Company’s equity plan) in the case of this clause (Y), in the previous 12-month period, and (B) 8.0%; and (2) the sum of any incentive fee paid to RCS Capital Management with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive fee is payable with respect to any calendar quarter unless the Company’s cash flows for the 12 most recently completed calendar quarters is greater than zero. | |
Amended and Restated 2013 Multi-Year Outperformance Agreement | |
On February 11, 2014, the Company, the Operating Subsidiaries, RCS Holdings and RCS Capital Management entered into the Amended and Restated 2013 Multi-Year Outperformance Agreement (the “Amended OPP”), which upon completion of the Restructuring Transactions superseded and replaced the 2013 Multi-Year Outperformance Agreement dated as of June 10, 2013 (the “Original OPP”), among the Company, the Operating Subsidiaries and RCS Capital Management. The Amended OPP provides that all the terms of award of RCS Holdings LTIP Units issued to RCS Capital Management pursuant to the Contribution and Exchange Agreement described above will be the same as previously applied under the Original OPP to the Operating Subsidiary LTIP Units that were contributed by RCS Capital Management to RCS Holdings, including without limitation the maximum award opportunity, the performance metrics, the performance measurement periods, and the vesting terms thereof. The sole purpose for entering into the Amended OPP was to facilitate the formation of RCS Holdings and simplify the Company’s structure by providing RCS Capital Management with RCS Holdings LTIP Units in lieu of Operating Subsidiary LTIP Units. | |
S-1 Filing | |
On February 13, 2014, the Company filed a Registration Statement on Form S-1 with the SEC relating to a proposed public offering of shares of Class A common stock of the Company (the “offering”). All the shares of Class A common stock included in the offering will be sold by the Company. Concurrently with the closing of the offering, the Company expects to complete a private offering (the “concurrent private offering”) to Luxor and the members of RCAP Holdings of shares of the Company’s Class A common stock at the public offering price per share. No discount or commission will be paid to the underwriters in connection with the concurrent private offering. The Company intends to use the net proceeds from the offering and the concurrent private offering to fund a portion of the cash consideration required for the pending acquisitions. The offering is not conditioned upon the closing of the pending acquisitions. If the pending acquisitions are not consummated, the Company intends to use the net proceeds from the offering for general corporate purposes, including additional acquisitions. There can be no assurance that any or all of the pending acquisitions will close. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation | ||
The consolidated financial statements include the accounts of the Company, Realty Capital Securities, RCS Advisory and ANST. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’) and Article 8 of Regulation S-X. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results. The statements of income for the years ended December 31, 2012 and 2011 represent the results of operations of Realty Capital Securities, the only Operating Subsidiary in operation during the period. The statement of financial condition as of December 31, 2012 was derived from the Realty Capital Securities audited financial statements at that date (since it was the only Operating Subsidiary that was operational at that date). | ||
Use of Estimates | ' | |
Use of Estimates | ||
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates, and these differences could be material. | ||
Cash and cash equivalents | ' | |
Cash and cash equivalents | ||
Cash and cash equivalents include all highly liquid instruments purchased with original maturities of 90 days or less. | ||
Available-for-sale Securities | ' | |
Available-for-sale Securities | ||
Available-for-sale securities represent investments by RCS Advisory in an equity mutual fund managed by a related party, which consist of shares of AR Capital Real Estate Income Fund. RCS Advisory treats these securities as available-for-sale securities with unrealized gains (losses) recorded in accumulated other comprehensive income (loss) and realized gains (losses) recorded in earnings. See Notes 4 and 5. | ||
Investment Securities | ' | |
Investment Securities | ||
Investment securities represent investments by Realty Capital Securities in an equity mutual fund managed by a related party, which consist of shares of AR Capital Real Estate Income Fund. Realty Capital Securities records both realized and unrealized gains (losses) in earnings on this investment, due to the fact that it is a broker-dealer. See Note 5. | ||
Receivables | ' | |
Receivables | ||
Receivables represent selling commission receivables and dealer manager receivables due from related party and non-related party entities in connection with the distribution of programs sponsored by an affiliate, AR Capital, LLC, and other sponsors. See “Selling Commissions and Dealer Manager Fees”. | ||
Reimburseable Expenses and Investment Banking Fees | ' | |
Reimbursable Expenses and Investment Banking Fees | ||
Reimbursable expenses and investment banking fees represent fees receivable for services provided to related parties and non-related party entities related to investment banking, capital markets and related advisory services performed. See “Investment Banking Advisory Services” and “Reimbursable Expenses”. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
The Company recognizes revenue generally when it is earned and realized or realizable, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. | ||
Selling Commissions and Dealer Manager Fees | ||
Realty Capital Securities receives selling commissions and dealer manager fees in connection with the distribution of programs sponsored by AR Capital, LLC and other non-related party sponsors. The selling commission and dealer manager fee rates are established jointly in a single contract entered into with each individual issuer. As the dealer manager for, or distributor of offerings, Realty Capital Securities generally receives selling commissions of up to 7.0% of gross offering proceeds for funds raised through the participating independent broker-dealer channel, which commissions are then redistributed to those third-party selling group participants who are FINRA member firms. Realty Capital Securities generally receives dealer manager fees of 3.0% of gross offering proceeds for funds raised, a portion of which may be redistributed to those third-party selling group participants who are FINRA member firms. Realty Capital Securities has discretion as to the reallowance of dealer manager fees to participating broker-dealers, based on such factors as the volume of shares sold and marketing support costs incurred by respective selling group members. Selling commission and dealer manager fee revenues and related expenses are recorded on a trade date basis as securities transactions occur. | ||
The Company analyzes its contractual arrangements to determine whether to report revenue on a gross basis or a net basis. The analysis considers multiple indicators regarding the services provided to their customers and the services received from suppliers. The goal of the analysis is to determine which entity is the primary obligor in the arrangement. After weighing many indicators, including Realty Capital Securities' position as the exclusive distributor or dealer manager primarily responsible for the distribution of its customers’ shares, its discretion in supplier selection, that Realty Capital Securities’ suppliers bear no credit risk and that the commission and dealer manager fee rates are established jointly in a single contract, Realty Capital Securities concluded that the gross basis of accounting for its commission and fee revenues is appropriate. | ||
Realty Capital Securities, serving as a dealer manager, receives fees and compensation in connection with the wholesale distribution of securities. Realty Capital Securities works with independent broker-dealers to solicit share subscriptions from their clients. The securities are offered on a "best efforts" or "reasonable best efforts" basis and Realty Capital Securities is not obligated to underwrite or purchase any shares for its own account. | ||
Investment Banking Advisory Services | ||
The Company, through its investment banking and capital markets division, receives fees and compensation for providing investment banking, capital markets and related advisory services. Such fees are charged based on agreements entered into with related party and non-related party public and private issuers of securities and their sponsors and advisors, on a negotiated basis. Fees and expenses that are unpaid are recorded in investment banking fees receivable and reimbursable expenses in the statement of financial condition. Income from investment banking agreements that are not deferred is recognized when the transactions are complete or the services have been performed. Income from certain investment banking agreements is recorded in deferred revenue in the statement of financial condition and is recognized over the remaining life of the offering, which normally ranges from 3 to 26 months. | ||
Transfer Agency Revenue | ||
ANST receives fees for providing transfer agency and related services. Such fees are charged based on agreements entered into with related party issuers of securities on a negotiated basis. Certain fees are billed and recorded monthly based on account activity, such as new account establishment fees and call fees. Other fees, such as account maintenance fees, are billed and recorded monthly. | ||
Services Revenue | ||
The Company receives fees for providing transaction management, marketing support, due diligence advice, events, training and education, conference management and strategic advice. Such fees are charged at hourly billing rates for the services provided, based on agreements entered into with related party issuers of securities on a negotiated basis. Such fees are billed and recorded monthly based on services rendered. | ||
Reimbursable Expenses | ||
The Company includes all reimbursable expenses in gross revenue because the Company as the primary obligor has discretion in selecting a supplier, and bears the credit risk of paying the supplier prior to receiving reimbursement from the customer. | ||
Marketing and Advertising | ' | |
Marketing and Advertising | ||
The Company expenses the cost of marketing and advertising as incurred. | ||
Income Taxes | ' | |
Income Taxes | ||
The Company files standalone federal and state income tax returns. Realty Capital Securities, ANST and RCS Advisory are treated as disregarded entities up to the date of reorganization (June 10, 2013) and as partnerships for federal and state income tax purposes thereafter. All income and expense earned by Realty Capital Securities, ANST and RCS Advisory flows through to their owner through the date of reorganization and to their partners (which includes the Company who is a 9.4% owner of these partnerships) thereafter. Income tax expense from operations and investments of Realty Capital Securities, ANST and RCS Advisory is not incurred by Realty Capital Securities, ANST and RCS Advisory but is reported by their owner through the date of reorganization and by their partners thereafter. | ||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards which relate to the Company's investment in the Operating Subsidiaries. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Current tax liabilities or assets are recognized for the estimated taxes payable or refundable on tax returns for the current year. | ||
A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. This determination is based upon a review of all available evidence, both positive and negative, including the Company's earnings history, the timing, character and amount of future earnings potential, the reversal of taxable temporary differences and the tax planning strategies available. | ||
The Company has adopted the authoritative guidance within ASC 740 relating to accounting for uncertainty in income taxes. The guidance prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken by the Company. See Note 6. | ||
Reportable Segments | ' | |
Reportable Segments | ||
The Company’s internal reporting is organized into four segments through its three Operating Subsidiaries, as follows: | ||
• | Realty Capital Securities, under two business lines: | |
◦ | Wholesale Broker-Dealer; and | |
◦ | Investment Banking and Capital Markets | |
• | RCS Advisory providing transaction management services | |
• | ANST providing transfer agency services | |
Recently Issued Accounting Pronouncments | ' | |
Recently Issued Accounting Pronouncements | ||
The Company is not aware of any recently issued, but not yet effective, accounting pronouncements that would have a significant impact on the Company's consolidated financial position or results of operations. |
AvailableforSale_Securities_Ta
Available-for-Sale Securities (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||||||||||
Disclosure of RCS Advisory's Investments | ' | |||||||||||||||||||||||
The following table presents information about the Company's available-for-sale securities as of December 31, 2013 (amounts in thousands): | ||||||||||||||||||||||||
Purchases | Sales | Realized Loss | Unrealized Losses(1) | Fair Value | Cost | |||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Mutual funds | $ | 10,097 | $ | 1,000 | $ | 59 | $ | 510 | $ | 8,528 | $ | 9,038 | ||||||||||||
_____________________________ | ||||||||||||||||||||||||
(1) Excludes the deferred income tax benefit. |
Income_Taxes_Income_Taxes_Tabl
Income Taxes Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Schedule of Components of Income Tax Expense (Benefit) | ' | |||||||||||
The components of income tax expense/(benefit) included in the consolidated statements of income for the years ended December 31, 2013, 2012 and 2011 were as follows (dollars in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Current income tax expense | ||||||||||||
U.S. Federal | $ | 1,630 | $ | — | $ | — | ||||||
State and local | 677 | — | — | |||||||||
Total current income tax expense | 2,307 | — | — | |||||||||
Deferred income tax benefit | ||||||||||||
U.S. Federal | (85 | ) | — | — | ||||||||
State and local | (20 | ) | — | — | ||||||||
Total deferred income tax benefit | (105 | ) | — | — | ||||||||
Total income tax expense | $ | 2,202 | $ | — | $ | — | ||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | |||||||||||
he reconciliation of the U.S. federal statutory income tax rate to the Company's effective tax rate for the years ended December 31, 2013, 2012 and 2011 were as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
U.S. federal statutory income tax rate | 35 | % | — | % | — | % | ||||||
Increase (decrease) in tax rate resulting from: | ||||||||||||
State and local income taxes net of federal benefit | 0.42 | % | — | % | — | % | ||||||
Non-controlling interests | (33.40 | )% | — | % | — | % | ||||||
Other | 0.18 | % | — | % | — | % | ||||||
Effective tax rate | 2.2 | % | — | % | — | % | ||||||
Schedule of Deferred Tax Assets and Liabilities | ' | |||||||||||
The Company had no deferred tax liabilities as of December 31, 2013 and 2012. The components of the deferred income taxes as of December 31, 2013 and 2012 were as follows (dollars in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Deferred tax assets | ||||||||||||
Other | $ | 1 | $ | — | ||||||||
Unrealized loss on available-for-sale securities(1) | 21 | — | ||||||||||
Deferred revenue | 104 | — | ||||||||||
Total deferred tax assets | $ | 126 | $ | — | ||||||||
_____________________________ | ||||||||||||
(1) Included in other comprehensive income. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of Future Minimum Rental Payments for Operating Leases | ' | |||
Future annual minimum rental payments due are as follows (in thousands): | ||||
Year Ended December 31, | Amount | |||
2014 | $ | 296 | ||
2015 | 196 | |||
2016 | 100 | |||
$ | 592 | |||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||
The following table presents the calculation of basic and dilutive earnings per share for the years ended December 31, 2013, 2012 and 2011(amounts in thousands): | ||||||||||||
Year Ended | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Earnings for basic and diluted earnings per common Class A share: | ||||||||||||
Net income | $ | 98,350 | $ | 7,412 | $ | 3,742 | ||||||
Net income attributable to non-controlling interests | 95,749 | 7,412 | 3,742 | |||||||||
Net income attributable to common stockholders | $ | 2,601 | $ | — | $ | — | ||||||
Shares: | ||||||||||||
Average Class A shares used in basic and diluted computation(1) | 2,500,000 | N/A | N/A | |||||||||
Earnings per common Class A share | ||||||||||||
Basic and diluted | $ | 1.04 | N/A | N/A | ||||||||
_____________________ | ||||||||||||
(1) Reflects the 2,500,000 shares of Class A common stock offered in the IPO. Shares of Class B common stock were subject to a lockup pursuant to an agreement with the underwriter in connection with the IPO. The lock up period expired during the 3 months ended December 31, 2013; however, these shares were excluded from the computation of diluted net income per share computation because they were anti-dilutive. |
Segment_Reporting_Tables
Segment Reporting (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Schedule of Segment Reporting Information, by Segment | ' | |||||||||||
The following table presents the Company's net revenues, expenses and income before taxes by segment for the years ended December 31, 2013, 2012 and 2011(in thousands): | ||||||||||||
Year Ended | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Wholesale broker-dealer: | ||||||||||||
Revenues | $ | 802,965 | $ | 286,572 | $ | 174,729 | ||||||
Expenses | 757,792 | 280,085 | 170,987 | |||||||||
Income | $ | 45,173 | $ | 6,487 | $ | 3,742 | ||||||
Transaction management: | ||||||||||||
Revenues | $ | 24,367 | $ | — | $ | — | ||||||
Expenses | 14,517 | — | — | |||||||||
Income | $ | 9,850 | $ | — | $ | — | ||||||
Investment banking and capital markets: | ||||||||||||
Revenues | $ | 47,884 | $ | 925 | $ | — | ||||||
Expenses | 5,107 | — | — | |||||||||
Income | $ | 42,777 | $ | 925 | $ | — | ||||||
Transfer agent: | ||||||||||||
Revenues | $ | 12,558 | $ | — | $ | — | ||||||
Expenses | 9,588 | — | — | |||||||||
Income | $ | 2,970 | $ | — | $ | — | ||||||
Revenue reconciliation | ||||||||||||
Total revenues for reportable segments | $ | 887,774 | $ | 287,497 | $ | 174,729 | ||||||
Intercompany revenues | (1,279 | ) | — | — | ||||||||
Total revenues | $ | 886,495 | $ | 287,497 | $ | 174,729 | ||||||
Income reconciliation | ||||||||||||
Total income for reportable segments | $ | 100,770 | $ | 7,412 | $ | 3,742 | ||||||
Corporate and other expenses | (218 | ) | — | — | ||||||||
Income before income taxes | $ | 100,552 | $ | 7,412 | $ | 3,742 | ||||||
Reconciliation of Assets from Segment to Consolidated | ' | |||||||||||
The following table presents the Company's total assets by segment as of December 31, 2013 and 2012 (in thousands): | ||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||
Segment assets: | ||||||||||||
Wholesale broker-dealer | $ | 32,058 | $ | 15,286 | ||||||||
Transaction management | 20,211 | — | ||||||||||
Investment banking and capital markets | 46,529 | 925 | ||||||||||
Transfer agent | 8,618 | — | ||||||||||
Total assets for reportable segments | $ | 107,416 | $ | 16,211 | ||||||||
Assets reconciliation: | ||||||||||||
Total assets for reportable segments | $ | 107,416 | $ | 16,211 | ||||||||
Other assets | 3,711 | — | ||||||||||
Total consolidated assets | $ | 111,127 | $ | 16,211 | ||||||||
Organization_and_Description_o1
Organization and Description of the Company (Details) (USD $) | Dec. 31, 2013 | Jun. 10, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 10, 2013 | Jun. 05, 2013 | Jun. 05, 2013 | Jun. 05, 2013 | Jun. 13, 2013 | Jun. 05, 2013 | Jun. 10, 2013 | Jun. 10, 2013 |
In Millions, except Share data, unless otherwise specified | Hatteras Funds Group [Member] | Investors Capital Holdings [Member] | Summit Financial Services Group [Member] | RCAP Holdings, LLC [Member] | RCAP Holdings, LLC [Member] | Majority Shareholder [Member] | Majority Shareholder [Member] | IPO [Member] | IPO [Member] | IPO [Member] | IPO [Member] | ||
Common Class B [Member] | Unclassified Stock [Member] | Common Class A [Member] | Common Class A [Member] | Common Class B [Member] | |||||||||
Subsidiary, Sale of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 |
Issuance of common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' |
Share price per share issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | $20 | $20 | ' | ' |
Proceeds from initial public offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $43.60 | ' | ' |
Shares received in reorganization | ' | ' | ' | ' | ' | ' | ' | 24,000,000 | ' | ' | ' | ' | ' |
Unclassified Shares Received | ' | ' | ' | ' | ' | ' | ' | ' | 100 | ' | ' | ' | ' |
Minority ownership percent in operating subsidiaries | 9.40% | 9.40% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest by Parent of Subsidiaries | ' | ' | ' | ' | ' | 100.00% | 90.60% | ' | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entities Throughout Period, Purchase Price | ' | ' | $40 | $52.50 | $49 | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entities Throughout Period, Purchase Price, Cash Portion | ' | ' | ' | 60.00% | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entities Throughout Period, Purchase Price, Class A Common Stock Portion | ' | ' | ' | 40.00% | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2013 | Jun. 10, 2013 | |
business_line | ||
segment | ||
subsidiary | ||
Summary of Significant Accounting Policies [Line Items] | ' | ' |
Restricted Cash and Cash Equivalent Item, Description | 'P90D | ' |
The Company's Interest in Net Assets of the Subsidiaries, Expressed as a Percentage | 9.40% | 9.40% |
Investment Banking Deferred Revenue Recognition, duration | '3 to 26 months | ' |
Number of Operating Segments | 4 | ' |
Number of Operating Subsidiaries | 3 | ' |
Number of Business Lines | 2 | ' |
Realty Capital [Member] | Maximum [Member] | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' |
Transaction Sales Commissions Earned by Related Percentage of Benchmark | 7.00% | ' |
Gross Proceeds from the Sales of Common Stock, Before Allowances, Percentage of Benchmark | 3.00% | ' |
OffBalance_Sheet_Risk_and_Conc1
Off-Balance Sheet Risk and Concentrations (Details) | 12 Months Ended |
Dec. 31, 2013 | |
investor | |
program | |
Risks and Uncertainties [Abstract] | ' |
Percentage of remibursable and investment fees concentrated in affiliated investment programs | 63.00% |
Number of direct investment programs | 1 |
Percentage of receivables from affiliated direct investment programs | 93.00% |
Number of affiliate investment programs | 3 |
AvailableforSale_Securities_De
Available-for-Sale Securities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Purchases | $10,097 | ' | |
Sales | 1,000 | ' | |
Realized Loss | 59 | ' | |
Fair Value | 8,528 | 0 | |
Equity in mutual funds [Member] | ' | ' | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' | |
Unrealized Losses | 510 | [1] | ' |
Fair Value | 8,528 | ' | |
Cost | $9,038 | ' | |
[1] | Excludes the deferred income tax benefit. |
Fair_Value_Disclosures_Fair_Va
Fair Value Disclosures Fair Value (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Available-for-sale securities | $8,528 | $0 |
Investment securities | 5,874 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Available-for-sale securities | 8,500 | ' |
Investment securities | $5,900 | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Income Tax Contingency [Line Items] | ' | ' | ' | ||
Federal Income Tax Expense (Benefit), Continuing Operations | $1,630 | $0 | $0 | ||
State and Local Income Tax Expense (Benefit), Continuing Operations | 677 | 0 | 0 | ||
Current Income Tax Expense (Benefit) | 2,307 | 0 | 0 | ||
Deferred Federal Income Tax Expense (Benefit) | -85 | 0 | 0 | ||
Deferred State and Local Income Tax Expense (Benefit) | -20 | 0 | 0 | ||
Deferred Income Tax Expense (Benefit) | -105 | 0 | 0 | ||
Total income tax expense | 2,202 | 0 | 0 | ||
Statutory rate | 35.00% | 0.00% | 0.00% | ||
State and local income taxes net of federal benefit | 0.42% | 0.00% | 0.00% | ||
Other | 0.18% | 0.00% | 0.00% | ||
Effective tax rate | 2.20% | 0.00% | 0.00% | ||
Deferred Tax Assets, Other | 1 | 0 | ' | ||
Deferred Tax Assets, Unrealized Losses on Available-for-Sale Securities, Gross | 21 | [1] | 0 | [1] | ' |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Accrued Liabilities | 104 | 0 | ' | ||
Deferred income taxes | $126 | $0 | ' | ||
RCAP Holdings, LLC [Member] | ' | ' | ' | ||
Income Tax Contingency [Line Items] | ' | ' | ' | ||
Non-controlling interests | -33.40% | 0.00% | 0.00% | ||
[1] | Included in other comprehensive income. |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 04, 2013 | |
Realty Capital [Member] | ||||
Loss Contingencies [Line Items] | ' | ' | ' | ' |
Rental expense | $400,000 | $300,000 | $300,000 | ' |
2014 | 296,000 | ' | ' | ' |
2015 | 196,000 | ' | ' | ' |
2016 | 100,000 | ' | ' | ' |
Total | 592,000 | ' | ' | ' |
Imposition of censure, fine paid | ' | ' | ' | $60,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 0 Months Ended | 0 Months Ended | |||||||
Sep. 19, 2013 | Dec. 23, 2013 | Jun. 13, 2013 | Dec. 31, 2013 | Jun. 13, 2013 | Jun. 05, 2013 | Jun. 05, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Common Class A [Member] | Common Class A [Member] | Common Class A [Member] | IPO [Member] | IPO [Member] | RCAP Holdings, LLC [Member] | Majority Shareholder [Member] | Majority Shareholder [Member] | ||
Common Class A [Member] | Common Class B [Member] | Common Class B [Member] | Parent Company [Member] | ||||||
Common Class B [Member] | |||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock, shares | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' |
Percentage of Economic Rights Held by Public | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' |
Common Stock, Dividends, Per Share, Declared, Per Annum | ' | ' | $0.72 | ' | ' | ' | ' | ' | ' |
Common Stock, Dividends, Per Share, Declared Annual Percent | ' | ' | 3.60% | ' | ' | ' | ' | ' | ' |
Share price per share issued | ' | ' | ' | ' | $20 | $20 | ' | ' | ' |
Common Stock, Dividends, Per Share, Declared | $0.18 | $0.18 | $0.18 | ' | ' | ' | ' | ' | ' |
Shares Held by Affiliated Entity | ' | ' | ' | ' | ' | ' | ' | ' | 24,000,000 |
Number of Votes Per Share | ' | ' | ' | ' | ' | ' | ' | ' | 4 |
Unclassified Shares Received | ' | ' | ' | ' | ' | ' | 100 | ' | ' |
Economic Rights Held by Affiliated Entity | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized, Threshold in Shares | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' |
Share-based Payment Award, Number of Shares Authorized, Threshold as Percentage of Shares Issued and Outstanding | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 5 Months Ended | 7 Months Ended | 12 Months Ended | 0 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Jun. 09, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Jun. 05, 2013 | |
Common Class A [Member] | Common Class A [Member] | |||||||
IPO [Member] | ||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ' | |
Net income | $47,454 | $50,896 | $98,350 | $7,412 | $3,742 | ' | ' | |
Less: net income attributable to non-controlling interests | ' | ' | 95,749 | 7,412 | 3,742 | ' | ' | |
Net income attributable to RCS Capital Corporation | ' | ' | $2,601 | $0 | $0 | ' | ' | |
Basic and diluted number of shares attributable to Class A stockholders | ' | ' | 2,500,000 | ' | ' | 2,500,000 | [1] | ' |
Net income per share attributable to RCS Capital Corporation | ' | ' | $1.04 | ' | ' | ' | ' | |
Issuance of common stock, shares | ' | ' | ' | ' | ' | ' | 2,500,000 | |
[1] | Reflects the 2,500,000 shares of Class A common stock offered in the IPO. Shares of Class B common stock were subject to a lockup pursuant to an agreement with the underwriter in connection with the IPO. The lock up period expired during the 3 months ended December 31, 2013; however, these shares were excluded from the computation of diluted net income per share computation because they were anti-dilutive. |
Net_Capital_Requirements_Detai
Net Capital Requirements (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ' | ' |
Ratio of Indebtedness to Net Capital | 0.76 | 3.07 |
Minimum Ratio of Aggregate Indebtedness to Net Capital | 1500.00% | ' |
Net Capital | $25,600,000 | $3,400,000 |
Excess Capital | 24,300,000 | 2,700,000 |
Event One [Member] | ' | ' |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ' | ' |
Minimum Net Capital Required for Entity | $100,000 | ' |
Event Two [Member] | ' | ' |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ' | ' |
Minimum Net Capital Required as Percent of Aggregate Indebtedness | 0.07% | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
quarter | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Related Party Transaction, Expenses from Transactions with Related Party | ' | $465,600,000 | $185,800,000 | $94,100,000 |
Due to Related Parties, Current | ' | 16,700,000 | ' | ' |
Allocation to Operating Subsidiaries of Expenses Directly Attributable, percent | ' | 100.00% | ' | ' |
Expenses allocated to the Operating Subsidiaries from the Company | ' | 2,300,000 | ' | ' |
Manager and management fee | ' | 10.00% | ' | ' |
Number of preceeding calendar years | ' | 3 | ' | ' |
Management fee | ' | 5,996,000 | 0 | 0 |
Incentive fee | 300,000 | ' | ' | ' |
Distributions on RCS Holdings Class A Units Entitled to RCS Holdings LTIP Units | ' | 10.00% | ' | ' |
Fraction of LTIP to Vest on a Yearly Basis, beginning on the third anniversary of the commencement date | ' | 33.30% | ' | ' |
Recognition Period for the OPP Fair Value, beginning on the grant date | ' | 'three years | ' | ' |
Number of Year Zero Coupon Bonds | ' | '2 years 4 months 24 days | ' | ' |
American Realty Capital [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Revenue from related parties | ' | 713,500,000 | 257,300,000 | 140,800,000 |
Less: intercompany receivables | ' | 48,400,000 | 2,700,000 | ' |
Parent [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Allocated operating expenses | ' | ' | 800,000 | ' |
Tax liability share agreement percent | ' | 85.00% | ' | ' |
ARC Advisory Services, LLC [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Allocated operating expenses | ' | 3,500,000 | ' | ' |
Allocated operating expenses payable | ' | 300,000 | ' | ' |
American National Stock Transfer [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Transfer agency services agreement term | ' | '10 years | ' | ' |
OPP Award [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Vesting Percentage | 33.30% | ' | ' | ' |
Outperformance agreement, performance term | ' | '3 years | ' | ' |
Grant date fair value | ' | 3,300,000 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | ' | 0.55% | ' | ' |
Expected dividend rate | ' | 3.60% | ' | ' |
Expected volatility rate | ' | 30.00% | ' | ' |
Equity-based outperformance plan | ' | 500,000 | ' | ' |
OPP Award [Member] | Manager [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Performance based award percentage, as percentage of the company's market capitalization | ' | 5.00% | ' | ' |
Incentive Fee Benchmark One [Member] | Manager [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Calculated incentive fee percentage, of the difference in product and core earnings | ' | 20.00% | ' | ' |
Incentive Fee Benchmark Two [Member] | Manager [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Percentage fee for incentive calculation | ' | 8.00% | ' | ' |
Common Class A [Member] | Other Affiliates [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Affilate ownership percentage | ' | 2.06% | ' | ' |
Securities (Assets) [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | ' | 8,500,000 | ' | ' |
Trading Securities, Short-term Investments, Amortized Cost | ' | $5,900,000 | ' | ' |
RCAP Holdings, LLC [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Decrease in Voting Power of Related Party, shares | ' | 3 | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
segment | |||
Segment Reporting Information [Line Items] | ' | ' | ' |
Number of Operating Segments | 4 | ' | ' |
Revenues | $886,495 | $287,497 | $174,729 |
Expenses | 785,943 | 280,085 | 170,987 |
Income before taxes | 100,552 | 7,412 | 3,742 |
Assets | 111,127 | 16,211 | ' |
Wholesale Broker Dealer [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | 802,965 | 286,572 | 174,729 |
Expenses | 757,792 | 280,085 | 170,987 |
Income before taxes | 45,173 | 6,487 | 3,742 |
Transaction Managment [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | 24,367 | 0 | 0 |
Expenses | 14,517 | 0 | 0 |
Income before taxes | 9,850 | 0 | 0 |
Investment Banking [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | 47,884 | 925 | 0 |
Expenses | 5,107 | 0 | 0 |
Income before taxes | 42,777 | 925 | 0 |
Transfer Agent [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | 12,558 | 0 | 0 |
Expenses | 9,588 | 0 | 0 |
Income before taxes | 2,970 | 0 | 0 |
Operating Segments [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | 887,774 | 287,497 | 174,729 |
Income before taxes | 100,770 | 7,412 | 3,742 |
Assets | 107,416 | 16,211 | ' |
Operating Segments [Member] | Wholesale Broker Dealer [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Assets | 32,058 | 15,286 | ' |
Operating Segments [Member] | Transaction Managment [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Assets | 20,211 | 0 | ' |
Operating Segments [Member] | Investment Banking [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Assets | 46,529 | 925 | ' |
Operating Segments [Member] | Transfer Agent [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Assets | 8,618 | 0 | ' |
Intersegment Eliminations [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | -1,279 | 0 | 0 |
Total consolidated assets | 111,127 | 16,211 | ' |
Segment Reconciling Items [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Income before taxes | -218 | 0 | 0 |
Other assets | $3,711 | $0 | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||||||
In Millions, except Share data, unless otherwise specified | Feb. 14, 2014 | Feb. 11, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 11, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Dec. 31, 2013 | Feb. 11, 2014 | Dec. 31, 2013 | Feb. 11, 2014 | Feb. 14, 2014 | Feb. 14, 2014 |
Subsequent Event [Member] | Subsequent Event [Member] | Cetera Financial Group [Member] | JP Turner & Company, LLC [Member] | First Allied Holdings, Inc. [Member] | Barclays Bank PLC and Bank of America [Member] | Barclays Bank PLC and Bank of America [Member] | Barclays Bank PLC and Bank of America [Member] | Luxor Capital Group, LP [Member] | RCAP Holdings, LLC [Member] | RCAP Holdings, LLC [Member] | Debt Assumption [Member] | Merger Consideration [Member] | Common Class A [Member] | Common Class A [Member] | Common Class B [Member] | Common Class B [Member] | Incentive Fee Benchmark One [Member] | Incentive Fee Benchmark Two [Member] | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Senior Secured First Lien Term Loan [Member] | Senior Secured First Lien Revolving Credit Facility [Member] | Senior Secured Second Lien Term Loan [Member] | Subsequent Event [Member] | Subsequent Event [Member] | First Allied Holdings, Inc. [Member] | RCAP Holdings, LLC [Member] | RCAP Holdings, LLC [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Manager [Member] | Manager [Member] | |||||
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | First Allied Holdings, Inc. [Member] | First Allied Holdings, Inc. [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||||||||
Subsequent Event [Member] | Subsequent Event [Member] | ||||||||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Independent Broker Dealers Operating under Cetera | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entities Throughout Period, Purchase Price | ' | ' | $1,150 | $27 | $207.50 | ' | ' | ' | ' | ' | $177 | $32 | $145 | ' | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entities Throughout Period, Purchase Price, Cash Portion | ' | ' | ' | 70.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entities Throughout Period, Purchase Price, Class A Common Stock Portion | ' | ' | ' | 30.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Portion of Commitment from Barclays and Bank of America, percent | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured Debt, Commitment | ' | ' | ' | ' | ' | 550 | 25 | 150 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Notes, Commitment | ' | ' | ' | ' | ' | ' | ' | ' | 120 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Preferred Securities, Commitment | ' | ' | ' | ' | ' | ' | ' | ' | 270 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Commitment | ' | ' | ' | ' | ' | ' | ' | ' | $50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | $0.00 | $0.00 | ' | ' |
Class B Shares Exchanged Under the Exchange Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,999,999 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class A Shares Received Under the Exchange Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,999,999 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class B Operating Subsidiary Units | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,051,499 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class B Common Stock Held by Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Economic RIghts Held by Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90.76% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Voting RIghts Held by Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class A Operating Subsidiary Units Contributed to RCS Holdings | ' | 26,499,999 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Subsidiary LTIP Units Contributed to RCS Holdings from RCS Capital Management | ' | 3,975,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
RCS Holdings LTIP Units Contributed to RCS Capital Management from RCS Holdings | ' | 1,325,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class A RCS Holdings Units received | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
RCS Holdings LTIP Units Issued to RCS Capital Management | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distributions on RCS Holdings Class A Units Entitled to RCS Holdings LTIP Units | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of Class A Operating Subsidiary Units Contributed to RCS Holdings | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class B Operating Subsidiary Units for Each Subsidiary held by Related Party | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class B Operating Subsidiary Units for Each Subsidiary held by Related Party, Percent | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction, revised Manager and Management Fee | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction, revised Calculated Incentive Fee Percentage, of the difference in Product and Core Earnings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' |
Related Party Transaction, Percentage Fee for revised Incentive Calculation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% |