Rithm Capital, the company that owns NewRez, Caliber Home Loans, and Shellpoint Mortgage Servicing, has announced that it is considering different options and intends to become a publicly traded company this year. This move is part of its strategic shift towards operating as an alternative asset manager.
During Rithm’s earnings call, CEO Michael Nierenberg stated that the company is actively exploring different options for its mortgage operating units and anticipates submitting an S-1 filing in the upcoming months.
Nierenberg expressed that by establishing a public entity, they would be able to generate additional sources of liquidity and enhance the diversification of their business model. Furthermore, he stated that they expect to raise substantial amounts of capital within the next three to nine months, enabling them to further expand their earnings in the near future.
In the first quarter, the company recorded a profit of $68.9 million, a decrease from $81.8 million in the previous quarter. The origination and servicing segments together generated a pre-tax income of $164 million and originated approximately $7 billion in loans. Rithm’s MSR portfolio had a total unpaid principal balance (UPB) of $603 billion, slightly lower than the previous value of $609 billion.
Nierenberg stated that after more than a year of the Federal Reserve’s active tightening cycle, their company has adeptly maneuvered the market and positioned itself for prosperity. He emphasized their commitment to credit and risk management, as well as their opportunistic approach to capital management, which has greatly benefited both the company and its shareholders.
Nierenberg expressed confidence that their company’s foray into the private capital sector and their commitment to maintaining excellent performance in their current portfolio will propel them into the next phase of growth. Despite ongoing uncertainties in the financial services industry, Rithm is in a favorable position to invest capital in promising opportunities. Nierenberg expressed optimism for Rithm’s achievements as they progress through 2023 and beyond.