Rithm Capital's Q4 2024: Navigating Contradictions in Newrez Listing, REIT Growth, and Capital Strategy

These are the key contradictions discussed in Rithm Capital's latest 2024Q4 earnings call, specifically including: Listing of Newrez and Capital Structure, Growth Opportunities for the REIT, Leveraging and Capital Structure Strategy, and Newrez Spin-off Timeline and Strategy:



Revenue and Earnings Growth:
- Rithm Capital reported 27% year-over-year growth in earnings for FY2024, with earnings available for distribution of $2.10 per share.
- The growth was driven by the company's asset management business and strategic investments in sectors like the mortgage company and Genesis Capital.

Asset Management and Investment Portfolio:
- Rithm's asset management arm, Sculptor, has returned 13.5% net growth in its multi-strat fund, with investments totaling $1.8 billion in residential mortgage assets.
- This growth is attributed to strong performance across various investment funds and strategic investments in residential mortgages.

Newrez Performance and Strategy:
- Newrez delivered a 12% quarter-over-quarter increase in pretax income, achieving $280 million in Q4 2024.
- The growth was supported by effective origination and servicing opportunities, despite a competitive market, and a focus on customer retention.

Infrastructure Investments and Future Expansion:
- Rithm Capital plans to announce a global energy infrastructure platform with Scale Capital Partners, expected to supply power to data centers globally.
- This initiative, driven by industry needs and expertise, positions Rithm to capitalize on the global demand for power solutions in the data center sector.