Rithm_Capital

Rithm Capital

Rithm Capital

American investment management company

Rithm Capital (Rithm) is an American investment management company headquartered in New York that focuses on real estate and alternative investments.

Quick Facts Formerly, Company type ...

Background

On May 16, 2013, Newcastle Investment Corp, a real estate investment trust (REIT) under Fortress Investment Group spunoff its residential mortgage related assets into a new REIT named New Residential Investment Corp. New Residential was listed on the New York Stock Exchange under the ticker 'NRZ' and would focus on investments related to mortgage servicing rights (MSR). There was a management agreement between New Residential and Fortress which stated Fortress would act as New Residential's manager and was entitled to 25% of the funds from operations as well as any profits from the sale of assets.[1][2] In September 2013, Fortress hired Michael Nierenberg, Bank of America's head of global mortgages and securitized products to run New Residential.[3]

In February 2015, New Residential acquired Home Loan Servicing Solutions for $1.3 billion.[4]

In January 2017, Citigroup sold $97 billion worth of MSRs to New Residential for $950 million as part of its plan to exit the mortgage servicing business.[5] In February, New Residential joined a consortium that included Jefferies, Third Point Management and Soros Fund Management to acquired $5 billion worth of unsecured forward flow consumer loans from Prosper Marketplace.[6] In December, New Residential acquired Mortgage Lender Shellpoint Partners for $190 million.[7]

In February 2019, Ditech filed for bankruptcy and in October sold its forward mortgage business to New Residential for $1.2 billion.[8]

In April 2021, Newrez a mortgage lending and servicing unit under New Residential agreed to acquire Caliber Home Loans from Lone Star Funds in a $1.675 billion deal. In February 2022, Newrez laid off 386 employees or about 3% of its mortgage division.[9]

In October 2021, New Residential acquired Genesis Capital from Goldman Sachs.[10]

In June 2022, New Residential became independent from Fortress by terminating its management agreement by paying a termination fee of $400 million and rebranded as Rithm Capital with the ticker 'RITM'. It was done to reduce costs of around $60 to $65 million and attract more institutional investors who avoid externally managed structures. It retain the employees of Fortress who were now permanently with Rithm and would be internally managed going forward[1][11][12]

In July 2023, after Goldman Sachs closed its consumer lending arm Marcus, it sold $1 billion of Marcus Loans to Värde Partners and $1.4 billion to Rithm.[13]

In July 2023, Sculptor Capital Management agreed to be acquired by Rithm for $639 million which was $11.15 per share. In August, Sculptor received a higher bid from a consortium of hedge funds led by Saba Capital Management along with Pershing Square Capital Management and Avenue Capital Group. Daniel Och was not satisfied with Rithm's offer and felt it didn't reflect the full value of the company.[14] In October, Rithm increased its bid to $720 million at $12.70 per share which was accepted by both Sculptor and Och. Although the consortium offered an even higher bid, it was rejected as Sculptor did not believe it could be delivered.[15] On November 17, the deal was completed after the shareholders agreed to the acquisition.[16]

References

  1. [1]
    "2022 Annual Report" (PDF). Rithm.
  2. [2]
    Plaehn, Tim (June 4, 2013). "Spin-Off REIT New Residential Investment Hits The Mortgage Sector From A Different Angle (NYSE:RITM) | Seeking Alpha". seekingalpha.com. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  3. [3]
    "Fortress Said to Hire BofA's Mortgage Chief Nierenberg". Bloomberg.com. September 12, 2013. Archived from the original on February 26, 2015. Retrieved December 31, 2023.
  4. [4]
    Chen, Angela (February 23, 2015). "New Residential to Buy Home Loan Servicing Solutions for $1.3 Billion". Wall Street Journal. ISSN 0099-9660. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  5. [5]
    "Citi to Exit Mortgage Servicing, Sell $97 Billion Portfolio". Bloomberg.com. January 30, 2017. Archived from the original on July 29, 2022. Retrieved December 31, 2023.
  6. [6]
    McLannahan, Ben (February 28, 2017). "Prosper to sell up to $5bn in loans to Fortress and Third Point". www.ft.com. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  7. [7]
    "New Residential to Acquire Mortgage Lender Shellpoint Partners". Wall Street Journal. November 29, 2017. ISSN 0099-9660. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  8. [8]
    Biswas, Soma (June 19, 2019). "Ditech Finds Two Buyers For Its Mortgage Servicing and Originations Business". Wall Street Journal. ISSN 0099-9660. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  9. [9]
    Nunes, Flávia Furlan. "NewRez lays off 386 following Caliber acquisition". HousingWire. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  10. [10]
    Clark, Patrick (October 11, 2021). "Goldman Sachs to Sell Fix-and-Flip Lender to New Residential". BNN. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  11. [11]
    Nunes, Flávia Furlan. "New Residential to internalize management, change name to Rithm Capital". HousingWire. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  12. [12]
    Mendoza, Candyd (June 20, 2022). "New Residential Corp. in major rebranding and restructuring". www.mpamag.com. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  13. [13]
    "Rithm Joins Varde in Snapping Up Goldman's Consumer Loan Book". Bloomberg.com. July 20, 2023. Archived from the original on July 20, 2023. Retrieved December 31, 2023.
  14. [14]
    Zuckerman, Gregory. "WSJ News Exclusive | Wall Street All-Stars Including Weinstein, Ackman Bid for Hedge Fund". WSJ. Archived from the original on January 13, 2024. Retrieved December 31, 2023.
  15. [15]
    Indap, Sujeet (October 27, 2023). "Daniel Och ends feud over Sculptor hedge fund". www.ft.com. Archived from the original on December 31, 2023. Retrieved December 31, 2023.
  16. [16]
    Indap, Sujeet (November 16, 2023). "Sale of Sculptor Capital on cusp of approval after hedge fund brawl". www.ft.com. Archived from the original on December 7, 2023. Retrieved December 31, 2023.
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