Rithm Capital forms $500 million partnership for transitional loans

NEW YORK - Rithm Capital Corp. (NYSE:RITM), a $6.4 billion market cap company trading near its 52-week high at $12.07, has established a strategic partnership with an unnamed institutional investor to fund the acquisition of up to $500 million in residential transitional loans, with potential to expand to $1.5 billion, the company announced Tuesday. According to InvestingPro data, the company has demonstrated strong momentum with a 15.8% return year-to-date.

The partnership will create a dedicated investment vehicle managed by Rithm Capital Advisors LLC, while loan servicing will be handled by Genesis Capital LLC, Rithm’s subsidiary specializing in residential transitional lending for professional real estate investors.

"This is another example of the breadth and depth of our platform, which enables us to create bespoke investment solutions that fit the individual needs of our investors," said Michael Nierenberg, Chairman, Chief Executive Officer and President of Rithm Capital.

The arrangement represents the latest development in Rithm’s strategy to build long-term partnerships as part of its diversified asset management platform. The company operates through multiple subsidiaries including Newrez, Genesis Capital, and Sculptor Capital Management.

Rithm Capital describes itself as a global asset manager with expertise in credit and real estate assets. The company’s business model integrates investment capabilities across residential and commercial lending, mortgage servicing rights, and structured credit.

The announcement comes as Rithm continues to expand its funds business and asset management capabilities. According to the press release statement, the company aims to capitalize on opportunities in the residential transitional loan sector through this new partnership. With analysts predicting profitability this year and the company showing strong returns over recent months, detailed analysis of RITM’s growth potential is available in the comprehensive Pro Research Report on InvestingPro.

In other recent news, Rithm Capital Corp. has announced a quarterly dividend of $0.25 per share for its common stock, payable on July 31 to shareholders of record as of June 30. The company also declared dividends for its Series A, B, and C preferred stocks, with varying rates based on floating interest rates. In a significant financial move, Rithm Capital priced $500 million in senior unsecured notes at an 8% interest rate due in 2030, with plans to use part of the proceeds to redeem existing notes due in 2025. This follows their announcement of the offering, which will cater to qualified institutional buyers and non-U.S. persons under specific regulatory conditions.

Analyst firms have shown interest in Rithm Capital, with Piper Sandler maintaining an Overweight rating and a $14 price target, citing the company’s strong performance in the current interest rate environment. BTIG analysts have also reiterated a Buy rating, setting a $16 price target and highlighting the company’s estimated net asset value of $12.70 per share. The analysts project distributable earnings of $0.51 for the second quarter and $2.20 for the full year 2025. Rithm Capital remains a notable choice for investors seeking growth opportunities in asset management.

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