- March 28, 2024
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Investor and entrepreneur Mario Garcia Jr., CEO and managing partner of Tampa-based Validus Group Partners, recently came across a rather unusual buying opportunity: To get back a unit his firm sold last year for $80 million.
Even better: Validus Group acquired the broker-dealer affiliate, Validus Strategic Capital Partners, from the original buyer, New York City-based RCS Capital Corp., for $5 million.
Validus Strategic Capital Partners has two units, SC Distributors and Strategic Capital Advisory Services, which both focus on alternative investment advice and services. The new deal, announced Dec. 3, was a pleasant surprise, Garcia tells Coffee Talk, given Validus Group initially sold the unit to RCS Capital in August 2014.“Did we sell these companies with the idea of buying them back?” asks Garcia. “No. We thought we sold two great business that were only going to get better.”
The crux of the problem is an RCS Capital subsidiary, Cetera Financial Group, with nearly 10,000 brokers and investment advisers, is mired in a series of financial and management issues. RCS Capital's CEO recently resigned, Moody's downgraded the firm's corporate credit rating and the firm's stock is in jeopardy of being delisted by the New York Stock Exchange, among other problems.
Those issues led to Garcia and Validus getting a chance to buy back the affiliate. Validus Group, founded in 2004, has a variety of business interests, from real estate investment trusts to senior living facilities to banking. Garcia says the plan now is to grow Validus Strategic Capital Partners, just like it was doing in the years that led up to the RCS Capital sale. “We are in a really unique spot and situation,” says Garcia. “We think it's going to be a great 2016.”