(Bloomberg) -- Nicholas Schorsch, formerly the executive chairman of RCS Capital, resigned from RCS, New York REIT and 11 other non-traded real estate investment trusts and direct investment programs sponsored by AR Capital.
Schorsch, 53, will leave the companies immediately to focus on strategy and potential liquidity events of closed programs sponsored by AR Capital, the company said in a statement today.
William Kahane will also resign from his role as a director of RCS Capital.
Schorsch helped create RCS, the independent broker-dealer powerhouse with at least $1.3 billion of deals closed or pending for nine companies, primarily broker-dealers, in the past year.
Earlier this month Schorsch resigned his post as chairman of American Realty Capital Properties. The company is reviewing its financial statements going back to last year after finding that accounting errors were deliberately hidden. ARCPs chief executive officer and chief operating officer also resigned in December.
I am completely confident in our management teams and our independent directors, Schorsch said in the statement. These changes are part of the natural evolution of our businesses given our size and continuing growth.
NONTRADED REIT GIANT
Investment products managed by AR Capital, primarily its nontraded REITs, have raised about $20 billion in equity mainly from individual investors since 2008, according to investment bank Robert A. Stanger & Co. Closely-held AR Capital currently has about 10 products being sold to investors including a New York City REIT and a hotel REIT. AR Capital has generated more than $600 million in fees since it began in 2007, according to an analysis by Robert A. Stanger.
Michael Happel will become chief executive officer of New York REIT and Kahane will become its executive chairman as well as chairman of ARC Realty Finance Trust. Peter Budko will take the role as chairman of Business Development Corp. I and II.
These actions should greatly minimize distractions and immediately eliminate any perceived or potential conflicts created as a result of Mr. Schorschs involvement on the boards of AR Capital-sponsored programs or on the board of RCS Capital whose subsidiary, Realty Capital Securities, is the wholesale broker dealer that distributes those programs, AR Capital said in the statement.
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