Rithm Capital announces $100 billion platform expansion with recent acquisitions

Rithm Capital has unveiled an ambitious $100 billion platform expansion, fueled by its recent acquisitions of Crestline, a credit management firm, and Paramount, a significant office real estate investment trust (REIT). The company’s leadership emphasized performance-focused strategies and disciplined capital allocation as they continue to grow their portfolio.

Strategic Acquisitions Bolster Growth

The acquisition of Crestline, which manages between $18 billion and $20 billion in assets, signals Rithm’s entry into the insurance and reinsurance business. Michael Nierenberg, Rithm’s Chairman, President, and CEO, highlighted Crestline’s contributions: "Crestline brings us direct lending, NAV lending, credit products, and, most importantly, an insurance and reinsurance business. So now we’re in the insurance business."

Rithm also acquired Paramount, a major office REIT with properties in New York and San Francisco. Nierenberg stressed the value of the deal, stating, "Acquiring assets for a little under $600 per foot versus replacement cost of $2,500 to $3,000 a foot gets us really excited." He added that the New York portfolio is over 90% leased, while San Francisco properties, currently at 70% occupancy, present a significant opportunity to grow net operating income (NOI).

Focus on Disciplined Capital Allocation

Despite these major transactions, Rithm remains committed to disciplined financial strategies, avoiding equity raises to fund acquisitions. Nierenberg reassured stakeholders during an earnings call, saying, "We will not be raising equity in the capital markets to fund these acquisitions. We will fund these acquisitions with a combination of balance sheet and third-party LPs and partners."

Nicola Santoro, Rithm’s CFO, provided additional financial context, noting, "At the end of the quarter, we ended with cash and cash equivalents on balance sheet of $1.6 billion... The expectation is at close, we will have approximately $1 billion of financing available to us, bringing us down to $1.3 billion of cash and cash equivalents post both the Crestline and Paramount transactions."

Strong Financial Performance and Shareholder Value

Rithm reported robust financial results for the third quarter of 2025, with pretax income, excluding mark-to-market adjustments, reaching approximately $295 million, a 7% increase quarter-over-quarter and a 20% increase year-over-year. This has resulted in a 20% return on equity (ROE) for the quarter.

The company also generated $300 million in earnings, achieving an 18% ROE. Book value at the end of the quarter stood at $12.83 per share, totaling $7.1 billion. Additionally, earnings available for distribution were $0.54 per diluted share, marking the 24th consecutive quarter where earnings exceeded dividends paid.

Baron Silverstein, Rithm’s President, commented on their performance, saying, "Our third quarter '25 pretax income, excluding mark-to-market, was approximately $295 million, which is up 7% quarter-over-quarter and 20% year-over-year and delivered a 20% ROE for the quarter, continuing our steady performance."

Optimistic Outlook for Future Growth

Looking ahead, Rithm’s leadership remains optimistic about the opportunities presented by the acquisitions. Nierenberg reiterated the company’s mission: "Our mantra of performance first will enable us to grow our platforms. We are not, to be clear, in an AUM race. More importantly, what we want to do is lead with results."

The CEO also expressed optimism regarding the Paramount acquisition, noting, "We’re seeing some of the highest leasing activity that we’ve seen, and this goes back to the pre-COVID days." He further revealed plans to close Crestline by December 1 and Paramount by mid-December, pending shareholder approval.

The company is also preparing to close its first evergreen asset-backed fund in the fourth quarter, hosted on a leading wealth management platform.

Analysts’ Concerns and Management's Reassurances

While Rithm’s leadership conveyed confidence in their growth strategy, analysts raised questions about valuation gaps and capital allocation. During the Q&A session, Nierenberg addressed concerns about share price and strategic actions, stating, "We're not raising equity around this transaction for these assets... We need to drive more, quite frankly, more FRE through our pipes to get revalued."

Analysts also questioned the sustainability of dividends and potential share buybacks. Nierenberg clarified, "We're not going to raise our dividend... there's no desire to increase the dividend at this point." Regarding share buybacks, he added, "We're not going to be doing share buybacks here."

Challenges Ahead

Despite the positive momentum, Rithm’s management acknowledged potential risks associated with the integration of acquired businesses, particularly as they enter new sectors. Nierenberg highlighted the importance of underwriting discipline, saying, "We’re underwriting first, and we don’t just go out and buy pools of assets unless... we have the ability to hopefully control an outcome."

As Rithm pursues its platform expansion, the company remains focused on delivering consistent results, expanding offerings for limited partners, and capitalizing on opportunities to generate significant returns.

A Transformative Quarter

With the acquisitions of Crestline and Paramount, Rithm Capital is poised to surpass $100 billion in investable assets, marking a transformative quarter for the company. By maintaining a disciplined approach to capital allocation and focusing on performance, Rithm aims to deliver long-term value for shareholders and partners alike. As Nierenberg summarized, "Our mission is still the same - put up solid results quarter after quarter, be able to offer more products to our LPs and partners, and take advantage of opportunistic situations to generate outsized returns and grow the company."

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