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| Between Rithm and Newrez, our mortgage company, we have approximately $850 billion pro forma of mortgage servicing rights, which continue to provide great income and great cash flow for our investors |
| Just turning to Slide 9 and the focus really is that we had a very good year with industry-leading ROE at 19% |
| And one of the reasons I wanted to highlight in our deck to performance, both at the Sculptor level and the Rithm level because the results are terrific, and we have what I would call really good investment professionals across both platforms |
| As we report our fourth quarter and full year earnings, another, what I would say a very solid quarter and a very good year consistent with earnings across all of our business lines |
| And as a result of COVID and people not being in the office, there's great, great opportunities |
| We continue to create solid earnings quarter-after-quarter and we did a couple of very strategic transactions, which put us in a position to, one, maintain earnings, and two, grow our alternative asset business |
| 2024 and beyond should be a very good investing year and the environments -- in the current environment and as we look forward, we are extremely well-positioned to invest in all asset classes, whether that'd be real estate, I think, it's important to note we have no legacy real estate, credit, structured products, equities, et cetera |
| The results at both Rithm and the Sculptor companies in '23 were excellent and the long-term performance in both the REIT and the asset management business put us in a position to be at the top of the pack |
| Our correspondent platform, cost effective customer and MSR acquisition channel, I would tell you that, we believe that we're best-in-class in how we position our business and we're continuing to expand our business into different asset classes as we go downstream with our customers and our growth into co-issue is going to begin in the first quarter of 2024 |
| Our view on AI across the Board is it's going to have significant benefits for our platform as we continue to evaluate different ways to better serve our customers, but also become more efficient across the entire operating business |
| The retail business has been excellent at recapture with their relationships with their customers |
| And this takes us back to -- I'm not sure everybody on this call is born, but the early '90s, which were the RTC days when the government was liquidating all these thrifts, those were great opportunities to deploy capital |
| Our mortgage company continues to be best-in-class |
| And when you think about where we're going to go in the alt space and think about the potential to grow in the direct lending space, whether it be in this business or other business lines, I think this is a good example of something that we feel we're a good market leader in |
| It's been a very good business for us |
| Both the Rithm business and the Sculptor funds had a very, very good 2023 |
| If we could change the narrative where we trade more like an alternative asset manager and you pick up several multiples versus EBITDA, I think we're going to be, I think the opportunity for us and our shareholders and LPs is a great one |
| But we also really very much differentiate ourselves with the origination model and being in all four of the different channels that you see there, retail, wholesale, correspondent, DTC and our partnership channel, we feel like we're positioned to growth going into '24 and going forward |
| And we think we're the best in the business |
| So I'm -- we're highly confident and really excited about the prospects of growing AUM, but more on the FRE side |
| And from an overall income standpoint and ROE, it's been a good business and we expect to grow that over time |
| Baron Silverstein A quarter came in already better than -- certainly better than December |
| But I think now we're pretty happy where we are |
| This should enable us to grow our credit and real estate businesses while prioritizing results for our LPs and shareholders |
| But I do believe that '24 is definitely going to be a better year from mortgage production overall |
| The Credit Opportunities Fund 8.8%, very good returns, and then the multi-strat is 10.6% |
| The Tactical Credit Fund net 17.9%, the Credit Opportunities Fund 8.6%, great performance and what I would call a volatile year |
| When we think about funding gaps, dislocated sectors like commercial real estate have a real need for gap capital and equity infusions not having legacy commercial real estate exposure, puts us in a very, very good place from a strategic standpoint |
| Those should do -- those should -- if we're successful, that will add additional synergies and create more expense saves |
| Underfunded sectors, such as construction financing, provide great opportunities for our Genesis Capital business |
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| So when we think about recapture, I think you could assume that our refi recapture numbers are going to be north of 50% and I think purchase recapture is a much more difficult thing |
| Obviously, there's a lot of headwinds on the mortgage side |
| Our GAAP net income, we had a loss of $88 million that's attributable to a write-down of some of our MSR assets |
| There is the -- I use this term, the lock-in effect for consumers that have those low-interest rates, right? So for them to sell a home today is more challenging from an affordability perspective |
| Most of our partnerships are on the realtor side, which is obviously a pretty slow business as well |
| So if you think about that $2.4 billion to $900 million, stuff down significantly |
| I do think it's going to be slower than maybe what certain people hope |
| However, we don't see that happening until inflation comes down a little bit closer to the Fed target of 2% and the data softens |
| Now it's a little bit harder to predict |
| Banks continue to retreat in that space |
| You look at the great financial crisis |
| You see the cost per loan here that continues to go down |
| On Fannie Freddie products, typically, those recapture numbers are a little bit lower |
| One thing I'm curious about asking is, this might be hopefully not too convoluted |
| So when we look at the opportunity today, we think the opportunities are going to be some -- are going to be more likely in the Build to Rent space as is clearly a shortage of housing here in the US |
| I think you could assume that it's going to continue that way |
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