Q4 2024 Rithm Capital Corp Earnings Call
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Speaker Change: I would now like to turn the conference over to M. A bullet Associate General Counsel. Please go ahead.
Speaker Change: Thank you and good morning, everyone I would like to thank you for joining us today for rhythm Capital's fourth quarter and full year 2024 earnings call. Joining me today are Michael Nierenberg, Chairman CEO and President of rhythm capital Nexsan Toro Chief Financial Officer of rhythm capital.
Barron's Silverstein: All in Barron's Silverstein president of numerous throughout the call. We are going to reference the earnings supplement that was posted this morning to the rhythm capital website Www dot rhythm cap Dot com. If you have not already done so I'd encourage you to download the presentation now I.
Barron's Silverstein: I would like to point out that certain statements made today will be forward looking statements. These statements by their nature uncertain I may differ materially from actual results I encourage you to review the disclaimers in our press release and earnings supplement regarding forward looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will.
Speaker Change: I'll be discussing some non-GAAP financial measures during today's call reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement and with that I will turn the call over to Michael.
Good day and welcome to the rhythm Capital 4th quarter and full year 2024 earnings call.
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Michael Nierenberg: Thanks, and good morning, everyone I want to welcome you to our fourth quarter and full year call for for rhythm. The company had a great fourth quarter and a great year.
What I thought I would do today, which is little bit different than our typical earnings call I figured I would take a step back and talk about the rhythm story for a minute. When you look at rhythm you may ask who are we.
Michael Nierenberg: We began the company in 2013, while at fortress to acquire Msr's from banks as Basel III capital rules made them too costly for banks to hold the company, which started with $1 billion of capital today has grown to $7 8 billion of permanent capital.
Michael Nierenberg: Along the way, we grow our asset management business, we began building and acquiring operating companies.
Michael Nierenberg: In 2022.
Michael Nierenberg: The board acquired the management contract with new residential from fortress and then we begin the next leg of our journey, which was to continue building a world class asset management firm.
Thank you and good morning everyone. I would like to thank you for joining us today for Ryhythm Capital's 4th quarter and full year 2024 earnings call. Joining me today are
Michael Nierenberg: Our thought was to go out and raise third party capital. So if you think about it while at fortress all the capital in all of the growth of the company was done in the public markets.
So to not confuse that story, we built it in the public market as we look at the next leg of our lives. We said, let's go raise private capital.
Michael Nierenberg: So in 2000 in August of 'twenty, two we changed our name to rhythm capital, while we still operate as a REIT.
Michael Nierenberg, chairman, CEO, and president of Rhythm Capital, Nick Santoro, chief financial officer of Rhythm Capital and Baron Silverstein, president of New Res. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the rhythm Capital website www.rhythmcap.com. If you've not already done so, I'd encourage you to download the presentation now. I would like to point out that certain statements made today will be forward looking statements. These statements by their nature are uncertain and different.
Michael Nierenberg: We continue to evaluate the benefits of changing our capital structure. There are still some things to do in order for us to get there.
Michael Nierenberg: When I look at the firm and we look at the firm we have what I believe is a complete product offering for shareholders and Lps and all asset classes ranging from real estate to.
Michael Nierenberg: Credit, including the new Hot word in the private capital sector of ABF, which is asset based finance something that we've been doing our whole careers.
materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward looking statements and to review their risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement and with that I will turn the call over to Michael.
Michael Nierenberg: Another exciting thing is we expect to announce soon probably in the next 30 days, a global energy infrastructure platform with scale capital partners, which will be supplying power to data centers.
Thanks, Emma. Good morning everyone. Um, I wanna welcome you to our 4th quarter and full year call for um for rhythm. The company had a great 4th quarter and a great year.
Michael Nierenberg: Across the world when I think about our business I like to think about why US one results, we must have performance to grow our business.
Um, what I thought I would do today, which is a little bit different than our typical earnings call. I figured I would take a step back and talk about the rhythm story for a minute. When you look at rhythm, you may ask, who are we?
Michael Nierenberg: Two we're very different than other asset managers, we have the ability to manufacture assets through our operating businesses.
We began the company in 2013 while at Fortress to acquire MSRs from banks as Basel 3 capital rules made them too costly for banks to hold.
The company which started with $1 billion of capital.
Michael Nierenberg: We underwrite.
Michael Nierenberg: Originate and service the assets from beginning to end servicing matters, we've been in a very benign credit cycle for many many years and at some point that will turn and having the third largest mortgage company or service or here in the United States is going to make a big difference for us.
Today has grown to 7.8 billion of permanent capital.
Along the way, we grew our asset management business. We began building and acquiring operating companies.
In 2022.
Michael Nierenberg: For our business, our asset management business.
Michael Nierenberg: We have you know we acquired sculptor in November of 2023, we've been together for one year and the business is doing great. The results are great and we look forward to future growth there as well so our value prop is the following results first again.
The board acquired the management contract of new residential from Fortress, and then we began the next leg of our journey, which was to continue building a world-class asset management firm.
Our thought was to go out and raise third party capital. So if you think about it, while at Fortress, all the capital and all the growth of the company was done in the public markets.
Michael Nierenberg: When you look at the family of of all of our companies on the investment side between rhythm sculptor and some of our other investment areas. We have over 400 individuals.
So to not confuse that story, we, we built it in the public markets as we looked at the next leg of our lives, we said let's go raise private capital.
Michael Nierenberg: Our operating business lines have approximately 7000 people.
So in 2000 in August of 22, we changed our name to Rhythm Capital. While we still operate as a re.
Michael Nierenberg: Number two when I look at our equity when looking at the sum of the parts were severely undervalued.
We continue to evaluate the benefits of changing our capital structure.
There are still some things to do in order for us to get there.
Michael Nierenberg: And I know as we continued as we trade as a REIT like others that trade of re either trade or book, a slightly above book or below book I think that the sector is extremely undervalued relative to when.
Michael Nierenberg: When you see other asset managers trading at 30 times a day.
Today, when I look at the firm and we look at the firm, we have what I believe is a complete product offering for shareholders and LPs and all asset classes ranging from real estate.
To credit
Michael Nierenberg: Our manufacturing engine for assets differentiates us from others, we can differentiate our product offerings, we can create whatever product offering one of our Lps would like so I'll now refer to our supplement which has been posted online I'm going to start with page three.
Including the new hot word and in the in the private capital uh sector of ABF which is asset-based finance, something that we've been doing our whole careers.
Another exciting thing is we expect to announce soon, probably in the next 30 days.
Michael Nierenberg: I'll go through most of the slides barrel will hit the mortgage company and then we'll go to Q&A. So when you look at the company today.
Michael Nierenberg: In rhythm and sculptor assets really being manage rhythm has a $45 billion of balance sheet sculptor has about 35 billion of AUM. The combined entity is about 80 billion of AUM seven 8 billion of permanent capital in the company makes a little north of $1 billion a year.
A global energy infrastructure platform with scale capital partners, which will be supplying power, the data centers, um, across the world.
When I think about our business, I like to think about why us.
One results. We must have performance to grow our business.
2
We're very different than other asset managers. We have the ability to manufacture assets through our operating businesses.
Michael Nierenberg: When you look at growth, 76% earnings growth since the first quarter of 2021 to the right side of the page you can see it.
We underwrite
Michael Nierenberg: Have a look new reservoir mortgage company, obviously scoped to the asset management business in the private markets Genesis capital one of the largest non bank <unk>.
Michael Nierenberg: Construction slash RTL lenders in the business last year in June we took over.
Michael Nierenberg: The management contract of something called Great Ajax, who was kind of a broken REIT.
Michael Nierenberg: Renamed It rhythm property trust with the intent of growing that into.
Originate and service the assets from beginning to end, servicing matters. We've been in a very benign credit cycle for many, many years, and at some point that'll turn and having the 3rd largest uh mortgage company or servicer here in the United States is going to make a big difference for um for our business.
Michael Nierenberg: Quite frankly like our rhythm like with what others have done in the public markets around externally managed vehicles and then we have a small less of our business in the door financial highlights page for.
Our asset management business.
Michael Nierenberg: Year over year growth and earnings 27%.
Michael Nierenberg: Earnings available for distribution of $2 10.
Many of you know we acquired sculptor in November of 2023. We've been together for one year and the business is doing great. The results are great, and we look forward to future growth there as well.
Michael Nierenberg: As I look at our Q4, GAAP net income $263 million or <unk> 50 per diluted per diluted share return on equity, 16% earnings available for distribution $316 million or <unk> 60 per diluted share return on equity, 20%. When you look at our dividend it's still not.
So our value prop is the following.
Results first again.
I think that the sector is extremely undervalued relative to um when you see other asset managers trading at 30 times.
Michael Nierenberg: <unk>, 2% and we still pay 25.
Michael Nierenberg: <unk> per common share book value. We ended the year at $12 56, which I think is pretty much unchanged versus the prior year.
Uh, DE.
Michael Nierenberg: And today.
Michael Nierenberg: Our book values is in and around the same.
Our manufacturing engine for assets differentiates us from others. We can differentiate our product offerings. We can create whatever product offering one of our LPs would like, so I'll now refer to our supplement which has been posted online. I'm gonna start with page 3.
Michael Nierenberg: For fiscal year 'twenty for full year, GAAP net income $835 million or $1.67 per diluted share 14% return on equity that includes marks and other things earnings available for distribution of $1 billion 105, $1.050 billion $2 intense $2 10.
I'll go through most of the slides. Barron will hit the mortgage company and then we'll go uh to Q and A.
Michael Nierenberg: Per diluted share and a 17% return on equity and then again the dividend yield of nine 2%, we pay a dollar a year.
Michael Nierenberg: Page five year in review.
So when you look at the company today between rhythm and sculptor, uh, assets really being managed. Rhythm has a $45 billion balance sheet sculptor has about $35 billion of AUM, the combined entity is about 80 billion of AUM 7.8 billion of permanent capital and the company makes, you know, a little north of a billion dollars a year.
Michael Nierenberg: Genesis capital, we acquired this company from Goldman's merchant Bank and I believe it was December of 2021 at that time, they were doing about $2 billion in origination. This year, we did $3 6 billion. When we acquired the company. The EBITDA number was about $40 million today, it's doing about in and around $100 million of EBITDA. So it's been a great <unk>.
Michael Nierenberg: <unk> story, obviously with banks and regional banks pulling back in certain areas. This company is poised for success and it's also poised for a lot of growth the asset management side as I pointed out we're one year in wood sculptor that's our asset management arm returns have been Super I mean, if you look at the multi strat fun last year at <unk>.
When you look at growth, 76% earnings growth since the first quarter of 2021. To the right side of the page, you can, you can have a look. New res our mortgage company, obviously scope to the asset management business in the private markets, Genesis Capital, one of the largest non-bank, uh, construction slash RTL lenders in the business.
Michael Nierenberg: Percent gross or 13 and a half net.
Last year in June we took over um the management contract of something called Great Ajax. It was kind of a broken re, uh, we renamed it Rhythm Property Trust with the intent of growing that into um quite frankly like a rhythm like what what others have done in the public markets around externally managed vehicles and then we have a small SFR business in a door.
Michael Nierenberg: And if you look at some of the other businesses around the real estate side and I'll get into that when we look at some of the Sculpsure slides. This great performance and it echoes my opening remarks that the only thing we care about is performance first performance first is going to lead to more AUM growth. It's not the other way around for us when I look at the investment portfolio, we did seven securitization and <unk>.
Financial highlights page 4.
year over year growth in earnings 27%.
Earnings available for distribution, $2.10.
Michael Nierenberg: For a little under $3 billion, we invested $1 8 billion in residential mortgage assets and one of the interesting deals. We did and this is very popular with a lot of Lps, we invested $200 million of equity and a large SRT transaction with a large bank where effectively we took a slice of a mortgage.
As I look at Q4 gap net income $263 million or 50 cents per diluted share return and equity 16%.
Earnings available for distribution $316 million or 60 cents per diluted share. Return in equity 20%.
Michael Nierenberg: Warehouse why us because we are the operational capacity in the event that there was something that went awry with one of their underlying mortgage bankers and the numerous again very proud of this company proud of the team Baron has done a great job as his leadership team top three U S mortgage servicer in total top five U S mortgage.
When you look at our our dividend, it's still 9.2% and we still pay 25 cents in, in, uh, per common share. Book value, we ended the year at 1256, which I think is pretty much unchanged versus the prior year, um, and today, um, our book value is in and around the same.
For fiscal year 24 full year.
Michael Nierenberg: <unk> in total and keep in mind, when we were at fortress, we built Mr. Cooper.
Michael Nierenberg: <unk>, formerly known as Nationstar, We started this company from scratch in 2018, so very very proud of our of the team and the results that we have there and that company is poised to grow and I think a lot of it and Barry will talk to that in a little bit when I look at our foundation for growth.
Yeah that income $835 million or $1.67 per diluted share, 14% return on equity that includes marks and other things, earnings available for distribution, a billion 1050.
Michael Nierenberg: We're going to continue to try to grow our third party asset management business, we want to shrink our balance sheet. When we wanted to do things more.
Michael Nierenberg: Again off balance sheet, if you look to the right side of the page here.
Michael Nierenberg: Rhythm property Trust I pointed out that was an opportunistic situation effectively.
Michael Nierenberg: We just took over the management contract. The team has done a great job on that we took it over in June it was losing money, we actually got it too.
Michael Nierenberg: At the end of Q4, where the company is flat to now making money and that that should continue to grow. This for rhythm shareholders that has an external managed vehicle. So management fees as we grow that will feed to the bottomline asset based finance the hot topic ever.
Michael Nierenberg: Everywhere every asset manager.
Michael Nierenberg: Everywhere. It is talking about that so its so called 30 trillion dollar opportunity we've been doing this or whole life energy transition I pointed out.
Michael Nierenberg: Going to be partnering and launching a global energy infrastructure fund what's.
Michael Nierenberg: What's going to happen there is we're going to partner with a couple of them.
Speaker Change: R O fortress colleagues.
Speaker Change: <unk> third party capital there was a huge shortage, obviously a power when it we're not going to get in on the on the Q&A, we don't need to get into the deep seek stuff but.
Speaker Change: What I would say is world class team, we won't enter a vertical unless we have the expertise and we're super Super pumped for that because the need for power around the globe is massive and the amount of capital needed to.
Speaker Change: To fund all this power, whether you're building power plants or your funding. Some of these these hyperscale is going to be an immense. So we're really excited about that.
Speaker Change: So thats page six.
Speaker Change: Some of the parts I'm not going to spend a ton of time here at the bottom line is I think our equity is extremely cheap I look at asset managers, where they trade. If you think about it we make a $1 billion, we trade at six and change times.
Speaker Change: We have asset management, we have operating businesses. The companies is extremely undervalued I think at some point.
Speaker Change: And I thought about this coming into the beginning of the year.
Speaker Change: It should be looking at some of the reason.
Speaker Change: And the real earnings potential around.
Not only us, but others and what people are doing in that sector. If you think about something a 30 times. So its something thats steady $1 billion at six times.
Speaker Change: I know, where I, where I would think about it capital deployment on page six this shows going back to 'twenty, one how we've grown our earnings.
Speaker Change: <unk>.
Speaker Change: We've grown it strategically we have focused on sectors that we believe are going to generate mid teens or teens returns.
Speaker Change: So when you have a look earnings growth again up 76% since 'twenty one.
Speaker Change: And our from a CAGR standpoint is up 16%.
Speaker Change: So very again very proud of that.
Speaker Change: Awesome.
Speaker Change: Just a couple quick points here on Genesis I mentioned before bought the company in 'twenty one.
Speaker Change: Another great team the team here at rhythm work very closely with them I expect this business to we got to be sensitive to credit obviously, because as I pointed out in my opening remarks, we've been in a very benign credit environment for many years.
Speaker Change: While saying that there's $3 6 billion.
Speaker Change: With $100 million of EBITDA I expect that to continue to grow the asset class itself is very much in Vogue, it's a mid teens type return.
Speaker Change: We're seeing a lot of demand from Lps for those for that type of product.
Speaker Change: A lot of a lot of different sponsors.
Speaker Change: And I think the upside there and when you look at.
Speaker Change: Unfortunately, some of the disasters happening whether it be on the West coast and other places we're poised to.
Speaker Change: Make loans in that in those areas.
Speaker Change: On the I'm going to I'm going to flip to the Sculpsure slides page 13.
Speaker Change: Yeah.
Speaker Change: Obviously, when we bought Sculpsure we closed in November I think was the 19th of November in 2023, so truly one full year and returns have been great fundraising is going extremely well.
Speaker Change: When I look at or we all collectively look at the teams.
Speaker Change: World Class.
Speaker Change: World Class real estate business World class multi strat business credit we're looking at we're going to look to continue to try to grow that business over time, we restarted the CLO platform last year.
Speaker Change: And we have also accelerated sort of growth in a sculptor non traded REIT.
Speaker Change: The other thing what I would say around the rhythm and sculptor rhythm as a true partner to Sculpsure. So when we look at things that sculptor can do whether it be launching a fund or something it's very likely that the support from rhythm will enable us to participate not only that front, but hope grow those funds over time.
Speaker Change: Page 14, just the performance again, if you look at.
Speaker Change: The sculptor Tactical credit Fund for example, 25% growth almost 20% net.
Speaker Change: Fantastic you look at you look at the multi.
Speaker Change: A multi strat I pointed out earlier 18 grows 13 and a half net and then when you look at the real estate business again.
Speaker Change: These guys or guys and gals are world class business second to none.
Speaker Change: When they go out with funds.
Speaker Change: We would expect those to be oversubscribed.
Speaker Change: Finally.
Speaker Change: I'll talk to rhythm property Trust and I'll turn it over to Darren again. This is the so called broken REIT, we took over in June.
Speaker Change: Right now, it's got about $250 million of equity in it.
Speaker Change: It earns a management fee and promote so as we continue to grow that and take advantage of dislocations in the commercial real estate market.
Speaker Change: Expectations that this vehicle could grow into a multibillion dollar vehicles with that.
Speaker Change: I'm going to turn it over to Darren who will talk about numerous thank you Michael and good morning to everybody.
Darren: So I'm turning to slide 20.
Darren: <unk> delivered another strong quarter with fourth quarter pre tax income, excluding mark to market of approximately $218.
Darren: Which is an increase of 12% quarter over quarter and delivering a 20% Roe.
Darren: We also finished the full year of 2024 with approximately $1 billion in pre tax income.
Darren: And that's up 26% year over year with a 19% Roe.
These results, though reflect the change in segment reporting by including MSR that were previously reported as service by others in the MSR hedge that were reported in the investment portfolio segment and we believe this change more accurately reflects the economics of rhythm as origination and servicing segment, which is.
Darren: New risks overall and more closely resembles industry norms.
Darren: Across.
Darren: Our sector.
Darren: Overall, we continue to gain momentum and these results show the power of our platform. We have 844 billion in total servicing now the number three servicer and 59 billion in funded volume for 2024 with the number five originator.
Darren: Turning to slide 21, you can also see that we remain in growth mode. The.
Darren: The last few years really present, the effectiveness of our well balanced platform by taking advantage of origination opportunities and servicing opportunities regardless of market conditions. Our 2025 strategy is no different we don't chase market share nor that we have a hope that rates will come down we remain focused on growing our brand.
Darren: Presence and delivering best in class customer experience in order to maximize customer retention and recapture.
Darren: Growing our <unk> platforms is also focused on building new partnerships, increasing wallet share with our existing customer base and also being opportunistic on MSR and platform acquisitions.
Darren: These initiatives, coupled with our operational excellence and improved efficiency through our AI initiatives and our technology continue to support our financial performance.
Darren: Turning and moving to slide 22, our origination business also continues to perform well.
Darren: We funded approximately $17 billion in the fourth quarter, which is up 9% quarter over quarter and $96 million in originations PPI up 19% from last quarter. This quarter is our best performance financial performance since 2021.
Darren: On margins and while the market always wrong.
Darren: It remains competitive we were able to improve our average margins to 131 basis points up eight basis points overall quarter over quarter, while maintaining market share.
Darren: While all of our channels were profitable in 2024, our multichannel strategy allows us to optimize on opportunities in all markets.
Darren: And this is shown by $270 million of originations PCI.
Darren: For the full year, which is up 12, 100% year over year.
Darren: And as I mentioned before one of our top priorities in our biggest opportunities our ability to retain our customers, which takes us to slide 23.
Our portfolio now sits at $3 7 million customers and the scale affords significant opportunities for portfolio recapture and customer growth through future cross sell strategies.
Darren: Our ability to grow our origination business is focused on being able to deliver recapture even without a rate rally and that includes cash out refis home equity loans purchase transactions to our existing customer base, but delivering our brand and making investments in building digital tools to enhance our customer experience is key to our success.
Darren: Moving to slide 24, our servicing business also continues to perform well. Our total managed servicing portfolio was $844 billion, which is comprised of $525 billion of owned Msr's directly serviced by <unk> $65 billion of own MSR service by others and two.
Darren: <unk> hundred $54 billion of third party servicing.
Darren: As I mentioned before the financials related to service by others portfolio is now reported in the new reservoir, the originations and servicing segment, but an important to note that we knew Reza always been actively managing these spo msr's in the performance of these third party servicers to ensure alignment to our standards.
Darren: Our third party servicing franchise also had a great quarter, we added $21 billion in net notional UBB, which is up 9% quarter over quarter, continuing to gain wallet share with our existing customer base and also adding new customers.
Darren: But our performance is always driven and continues to be driven by our operational efficiency.
Darren: Through our proprietary technology, our scale and cost leadership and that is seen in our ability to transfer $1 2 million loans in 2024.
Darren: Yes.
Darren: On slide 20 on slide 25, you'll see our owned MSR performance, which not surprisingly is reflective of market conditions with higher interest rates and low prepayment speeds and I'm not going to spend a lot of time on that moving to slide 26, right on our market, leading special servicing franchise.
Darren: It's really our presentation on on our core capability of our overall platform. It's an important business for us as it is both fee based capital light and provide significant operating leverage to our platform while.
Darren: While delinquencies remained low from a historical context, and Michael talked about that you can see in the chart on the bottom left the delinquencies are slowly on the rise and we help homeowners find a solution to stay in their home. This is proven not only with our third party clients continue to grow with us, but also through our performance shown on the right side of the slide as.
Darren: Well as supporting homeowners in times of need like the recent hurricanes in Los Angeles fires.
Darren: I continue to believe our business is as best position as it ever has been and I'm looking forward to continuing telling the new rep, New res growth story in 'twenty five.
Michael Nierenberg: Back to you Michael.
Michael Nierenberg: Thanks, operator, if we could just turn it open up the alliance for Q&A that would be great.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
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Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question comes from Bose, George with K VW. Please go ahead.
George Bose: Hey, good morning.
George Bose: Could you give us any updated thoughts on the potential listing of new rates in 2025, and then could you also just tie that into your comments Michael in your prepared remarks about potential changes in the capital structure at rhythm.
George Bose: Sure so.
George Bose: We're not there yet on listing the company.
George Bose: We are we if you talk to Nick and the team we've taken steps to have separate segment reporting where everything is now listed at the mortgage company. So you have a clear view into how that company is doing.
George Bose: I think the big part for US is how do we think about shareholders and not just at the mortgage company level quite frankly and get the proper multiple for how we.
George Bose: How we see ourselves in the business. That's one of the reasons why I opened up a little different than I typically do.
George Bose: There are some pieces that need to come into play one is we need to if we were going to do that we want to grow our REIT.
George Bose: So you'd have a dedicated REIT you'd have a C corp top no different than some of the best in class asset managers.
George Bose: And then we'd have our operating companies below.
George Bose: So that's really the path we're on I will say the M&A pipeline of stuff that we're looking at is extremely robust whether that be on the asset management side.
George Bose: And just some of the other things that you know manufacturing businesses.
George Bose: As I referred to them in our opening remarks, but.
George Bose: To tell you today that we're going to lift the company I can't do that but we are working on our capital structure and we hope to have some change in that.
George Bose: We put a lot of thought and talked to have some good thoughtful board discussions I'm hopeful at some point down the road that we will get there, but we need to grow some scale in the REIT right now.
George Bose: Okay.
George Bose: That's helpful. Thanks, and that's it.
Speaker Change: In terms of timeline suggests that it's probably not a 2025 event.
George Bose: You sort of build out the other piece is that fair.
George Bose: No I mean, I'd like to do it in 2024, but that's gone.
George Bose: So I.
George Bose: I think if we can get it done in 'twenty five we absolutely will because I still believe that our common is fundamentally undervalued.
George Bose: Okay, Great and actually just another quick one this back I know you can't discuss it but is that.
George Bose: Would that be part of Sculpsure to the extent that that happens.
George Bose: If it does happen it will be a rhythm company I can't go into a lot of details, but the way we think about the business if we could create more.
George Bose: Fee, earning businesses that flow up to the parent company.
George Bose: We're going to we're going to do that.
George Bose: And as we think about diversification.
George Bose: There are certain types of vehicles that we could potentially explore.
George Bose: Okay, Great makes sense. Thanks.
George Bose: Thanks.
Speaker Change: The next question comes from Doug Harter with UBS. Please go ahead.
Speaker Change: Thanks.
Michael Nierenberg: Michael you talked about.
Speaker Change: Scaling up the REIT in your last answer just what assets do you have to find attractive and kind of how would you look to scale up.
Speaker Change: Doug I think it's more of the same and what we do if you look at the business, we've allocated a lot of capital.
Speaker Change: More and more capital to.
Speaker Change:
Speaker Change: The mortgage company has a lot of capital obviously, the MSR business has been extremely beneficial to the company and to shareholders.
Speaker Change: We continue to believe in that asset as Barry pointed out I think we have a little under 850 billion.
Speaker Change: <unk> continue to grow the third party servicing there when you look at.
Speaker Change: Just give or take for purposes of this discussion $4 40 to $4 510 year note you have mortgages trading $121 30 in the agency market you look at some of the non QM assets that we actually produce or you look at the Genesis side that where we were.
Speaker Change: We can produce I think that's where you're going to see growth in <unk>.
Speaker Change: On the REIT side.
Speaker Change: Just along those lines do you how do you see kind of the investor property loans today other private label securitization.
Speaker Change: No kind of.
Speaker Change: What impact did the Washington discussions around the Gse's hub.
Speaker Change: Those opportunities.
Speaker Change: And you know.
Speaker Change: Hi.
Speaker Change: When and if that happens I think that we are going to be so well positioned between our capital base.
Speaker Change: The <unk> that we have in our system.
Speaker Change: And our mortgage company, which I think is in a class as a world class mortgage company, so whether they be investor loans whether.
Speaker Change: If the agencies went back to the old way, where they get privatized keep in mind in the old days G fees were with a 25 basis points or something give or take that right. Darren when you look at where they are they're 50 basis points. Today. So there's probably some given part of that could be as you think about the reinsurance market.
Speaker Change: Around.
Speaker Change: That could possibly work and I think that could work.
Speaker Change: But I think we will be extremely well positioned for that.
Speaker Change: And I'd like to see it quite frankly.
Speaker Change: And Michael just one more if I could just on your comments about growing and scaling. The REIT can you do that with your existing capital base or would you need to raise additional capital to do that.
Speaker Change: It depends it could be a combination of both.
Speaker Change: Keep in mind, most Reits tend to operate by themselves. There is not a lot of M&A activity in the REIT space.
you know, 120, 130 in the agency market, you look at some of the.
Speaker Change: When I look at our business and think about permanent capital and having a little under 8 billion. That's a good place to be away from our so called asset management arm. So if we could grow that and then at some point create management fees, I think where we're off to the races.
Non-QM assets that we actually produce or you look at the Genesis side that what, what we, what we can produce, I think that's where you're gonna see growth in in on the side.
Just along those lines, do you, how do you see kind of uh the investor property loans today, you know, other private label securitization and.
Speaker Change: Great. Thank you.
Speaker Change: Thanks, Doug.
Speaker Change: The next question comes from Kenneth Lee with RBC capital markets. Please go ahead.
You know, kind of, uh, what impact, you know, to the Washington discussions around the GSEs have on those opportunities.
Kenneth Lee: Hey, Thanks for taking my question. Good morning, just one on sculptor.
You know,
Speaker Change: You talked about some initiatives to grow the credit business.
I, when, when and if that happens, I think that we are going to be so well positioned between our capital base.
Speaker Change: I wonder if I could get a little bit more detail in terms of what particular initiatives.
The OPs that we have in our system.
And our mortgage company, which I think is in a class, you know, it's a world class mortgage company, so whether they be investor loans whether um you know if if the agencies went back to the old way where they get privatized. Keep in mind, you know, in the old days, GCs were were they 25 basis points or something, give or take that right Baron, um, you look at where they are, they're 50 basis points today, so there's probably some given part of that could be as you think about the reinsurance market, um,
Speaker Change: And what are your expectations in terms of fundraising for this year. Thanks.
Speaker Change: So on the initiatives, it's more of the same its lead with performance performance is going to bring in more AUM.
Speaker Change: The team there is a large capital formation team.
Speaker Change: Everybody's out on the road and seeing Lps.
Speaker Change: When I think about the initiatives to actually grow whether it be credit and some of the other businesses.
Speaker Change: There's two ways really to do it right you can do some M&A, but when we can be the folks that are going to pay 20 or 30 X.
Um, around, you know, how that could possibly work, and I think that could work, um, but I think we will be extremely well positioned for that, um, and I'd like to see it quite frankly.
Speaker Change: On a multiple basis.
Speaker Change: So it could be some.
Speaker Change: There is a couple of different platforms out there that we're actually looking at.
And Michael just one more if I could uh just on your comments about growing and scaling the reed. Can you do that with your existing capital base, or would you need to raise, um, additional capital to to do that.
Speaker Change: But I think real performance is going to bring in a lot more capital. If you you know if you.
Speaker Change: Think about it.
Speaker Change: The company is.
Speaker Change: A great company, obviously in the press for a bit but out on the other side of your unchanged removed.
Um, it depends. It could be a combination of both.
Um, you know, keep in mind most wreaths tend to operate by themselves. There's not a lot of M&A activity in the reach space.
Speaker Change: Performance great everywhere so.
Speaker Change: I'm excited we talked we all talk to a lot of Lps and I think youre going to see we're going to see a fair amount of capital come in.
Um, you know, when I look at our business and think about permanent capital and having a little under 8 billion, that's a good place to be away from our so-called asset management arm.
Speaker Change: As you think about how much capital to be raised this year.
So if we could grow that and then at some point create management fees I think we're we're, you know, we're off to the races.
Speaker Change: We have right now the real estate guys are I can't give you specific numbers, but those guys are.
Great, thank you.
Those guys are doing well with the credit side is doing well so we expect a pretty good year.
Thanks stuff.
Next question comes from Kenneth Lee with RBC Capital Markets. Please go ahead.
At Blackstone, where Apollo Unfortunately, but.
There's a lot of room for us out there.
Hey, thanks for taking my question. Good morning, um, just one on, on sculptor.
Speaker Change: Gotcha very helpful. There.
Speaker Change: One follow up if I may just on Sculpsure as well.
Uh, you talked about some, some initiatives to to grow the credit business, um, wondering if I could get a little bit more uh detail in terms of, you know, what, what particular initiatives, uh, and what are your expectations in terms of uh fundraising uh for this year. Thanks.
Any updated outlook around expense base for Sculpsure.
Speaker Change: Is it sort of like still still in an investment phase there.
Speaker Change: Any kind of color around where expenses could trend there. Thanks.
Speaker Change: I think it's more beer you honestly.
Um, so on the initiatives it's more of the same. It's lead with performance, performance is going to bring in more AUM.
Speaker Change: We always sort of evaluate expenses, whether it be at sculptor whether it be at the mortgage company.
Um, you know, the team, you know, there's a large capital formation team, um, everybody's out on the road and you know seeing LPs, um, when I think about the initiatives to actually grow whether it be credit and some of the other businesses, you know, there's, there's two ways really to do it, right? You could do some in M&A, but when we can't be the folks that are gonna pay 20 or 30 X.
Speaker Change: We'd be at rhythm.
Speaker Change: Creating synergies obviously across all of our operating platforms will help and we continue to work on those.
Speaker Change: So we could have some saves at some point I think.
Speaker Change: Yes. It is.
Speaker Change: As part of our disciplined about risk management, putting up higher earnings for our shareholders.
Speaker Change: Gotcha. Thanks.
Speaker Change: You very much.
You know, on a multiple basis, um, so it could be some.
Speaker Change: Thank you Kim.
Speaker Change: The next question comes from Giuliano Bologna.
You know, there, there's a couple of different platforms out there that that we're actually looking at, um, but I think it real real performance is going to bring in a lot more capital, if you, you know, if you think about it.
Speaker Change: <unk> with Compass point. Please go ahead.
Giuliano Bologna: Good morning, and congrats on the continued performing well.
You know, the company is um a great company, obviously in the in in the press for a bit, but you know, out on the other side of urine change removed, um, performance great everywhere so you know I'm, I'm excited we talked, we all talked to a lot of LPs, and I, and I think you're gonna see we're gonna see a fair amount of capital come in.
Speaker Change: I think I'd be curious about when you think about the kind.
Giuliano Bologna: Kind of growing the rights would there be any.
Speaker Change: Valuate reliability.
Speaker Change: Push assets into the rental property trust structure to use that as a public vehicle or would you want to create more separate vehicles over time.
Um, as you think about.
Speaker Change: Slightly different strategies.
How much capital to be raised this year, um, you know.
Speaker Change: On the.
Speaker Change: Kind of a REIT side in the world.
We right now the real estate guys are um I can't give you specific numbers, but those guys are, um you know those guys are doing well the credit side is doing well, so we expect a pretty good year. We're not Blackstone or Apollo, unfortunately, but um, you know, there's a lot of room for us out there.
Speaker Change: I think it's both.
Speaker Change: Prefer not to transfer assets from one <unk> to another just to be clear on that we are looking at a transaction for you know for example, now in the commercial real estate sector, where both rhythm and rented property trust will likely participate.
Speaker Change: As two separate entities.
Speaker Change: Because obviously the amount of capital and rhythm property Trust is not large enough to and when we think about risk in.
Got you, very helpful there and and 11 follow up uh if I may just, just on sculptor as well, um, any updated outlook, uh, around the expense base for for sculptor, uh, it just sort of like still still an investment phase there, um, just, you know, any kind of color uh around works could trend there. Thanks.
Speaker Change: And the sheer size of doing any one thing we want to make sure that were balanced from a from a risk perspective.
Speaker Change: It's going to be more where we'd like to continue to create more vehicles. We wanted to think about other verticals that we may or may not have been in and I pointed out on the energy infrastructure side.
You know, I think it's more BAU honestly, um, you know, we can, we always have evaluate expenses whether it be it's sculptor whether it be at the mortgage company, whether we be at rhythm.
Speaker Change: A couple of World class folks building a business have third party capital commitments trillions needed for that that's another example of something that will grow but that'll be more in the private fund side.
You know, creating synergies obviously across all of our operating platforms will help and we continue to to work on those, um, so we, we could have some saves at some point, I think, um, yeah, I mean it's, it's just part of our discipline about risk management, putting up higher earnings for shareholders.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: So a little bit of different angle, but theirs.
Speaker Change: You've obviously done.
Speaker Change: Great job historically, making acquisitions on the mortgage company, our MSR side I'm curious are you talking about M&A is there are there any opportunities.
Got you.
Thank you very much.
Thank you, Cam.
Speaker Change: Around the mortgage company originates.
The next question comes from Giuliano Bao.
Speaker Change: Originates sorry, originator, servicers and or bulk pools.
With Compass Point, please go ahead.
Speaker Change: You might be looking at.
Speaker Change: Focus on that money elsewhere around the platform first.
Uh, good morning. Congrats on the continued performance, one thing I'd be curious about when you think about the um kind of growing the roots would there be any, uh, you know, value or like ability to you know push assets into the uh rhyth and property trust structure and use that.
Speaker Change: No listen we look at everything or if theres something thats accretive for the capital and for shareholders will have a hard run at it there's not that many mortgage companies quite frankly that are in our opinion from where we sit.
Speaker Change: That or I shouldn't say worth it but like we don't we don't need anything else.
As a public vehicle or would you want to create, you know, more separate vehicles over time that have slightly different strategies, um, on the uh on the kind of you know read side of the world.
If theres something Thats accretive obviously, we love the MSR asset that's been very good to us and our shareholders.
I think it's both um we prefer not to transfer assets from 11 reed to another just to be clear on that, um, we are looking at a transaction for now, you know, for example, now in the commercial real estate sector, where both rhythm and rhythm property trust will likely participate.
Speaker Change: We'll continue to look at that we're starting to see some real demand for MSR funds as well. So you may see some of that start going off balance sheet, and then and that frees up some capital to but what I would say Juliana.
Speaker Change: If there's something out there and we have an M&A team, we look at anything and everything.
Um, as two separate entities.
Um, because obviously the amount of capital and rhythm property trust is is not large enough to, you know, when we think about risk and
Speaker Change: Just need to have the expertise around the house execution.
Speaker Change: Okay. That's helpful and maybe one last one you talked about Joe.
Um, and the sheer size of doing any one thing we want to make sure that we're balanced from a, from a risk perspective, um, it's gonna be more where we'd like to continue to create more vehicles. We want to think about other verticals that we may or may not have been in, you know, I pointed out on the uh energy uh infrastructure side, um, couple world class folks, you know, building a business, have third party capital commitments, trillions needed for that. That's another example of something that will grow, but that'll be more in the private funding.
Speaker Change: That's all for me as a C Corp conversion.
Speaker Change: Is that something that you could pursue in the near term or is there any kind of your preference to try to do something with the mortgage company personal IPO wise before you proceed.
Speaker Change: Could you pursue a secret rohit sooner.
Speaker Change: I think we could do both honestly.
Speaker Change: But it's got to be something that is highly accretive for both shareholders and the company.
side.
Speaker Change: If you think about that as a REIT, we paid out I think since $25 8 billion of dividends.
And, and this might be, you know, take a little bit of a different angle, but there's uh you've obviously done uh a great job historically making acquisitions on the uh mortgage company or MSR so I'm curious when you, when you talk about M&A is there are there any opportunities?
If you had that capital and the compounded that capital. It's my belief I think the stock would be.
Speaker Change: In the twenties.
Speaker Change: Or it should be anyway, so when we look at all of that stuff.
You know, around the mortgage companies, you know, originating sorry originator servicers and or you know both pools that you do that you might be looking at or you uh focus on them in a, you know, elsewhere on the platform first.
Speaker Change: All this stuff goes into our calculation, but.
Speaker Change: I think anything's on the table.
Speaker Change: Knowing as we all know each other.
Speaker Change: If we could do something yesterday I'd prefer to do it yesterday.
No, I think, you know, listen, we look at everything if if there's something that's a creative for the capital and for shareholders we'll have a hard run at it. There's not that many mortgage companies, quite frankly, that are in in our opinion from where we sit.
Speaker Change: That's very helpful. I appreciate it I'll jump back in the queue.
Speaker Change: Thanks.
Speaker Change: The next question comes from Eric Hagen with BTG. Please go ahead.
That, that are, I shouldn't say worth it, but like we don't, we don't need anything else.
Speaker Change: Hi, Thanks, Good morning, guys.
Um, if there's something that's a creative, you know, obviously we love the MSR asset that's been very good to us and our shareholders, um, we'll continue to look at that, you know, we're starting to see some real demand for MSR funds as well so you may see some of that start going off balance sheet and then and and that frees up some capital, uh, too, but you know what I would say Juliana, we if there's something out there and and and we have an M&A team we look at anything and everything.
Eric Hagen: When we look to the investment portfolio and you strip out the leverage that's associated with the hedging of the MSR.
Speaker Change: What is the leverage in that portfolio, how stable do you feel like it is there.
Eric Hagen: And do you feel like there's even some room to apply more leverage.
Speaker Change: New reservoir to get spun out at some point.
Speaker Change: Most of that most of the balance sheet, but I would say today is really around two two asset classes MSR is in.
Speaker Change: And our hedges in the mortgage company. So if you think about it whether we whether we have swaps on whether we have treasuries are and whether we have agency mortgages, that's a big chunk of the overall balance sheet at.
Just need to have the expertise around the house taxi.
That's, that's helpful. Maybe one last one, you, you, you, you talked about, you know, the, uh, potential for me is is CO conversion.
I is that something that you know you could pursue, you know, in the near term or is there any kind of, you know, preference to try to do something with the mortgage company partial IPO wise before before you do that or could you pursue a COver sooner.
Speaker Change: At the rhythm level the.
Speaker Change: The other large part what I would say on the non agency space as the Genesis loans.
Speaker Change: Because.
Speaker Change: We finance those with some of our either banks or insurance companies or do securitization.
Um, I think we could do.
Speaker Change: The short answer is we could increase leverage I think we will only do that if we think it's prudent.
Both, honestly, um, but it's gotta be something that's highly creative for both shareholders in the company.
Speaker Change: But I don't think we need to right now based on the earnings power of where we sit.
You know, if you think about that as a re we paid out, I think since 21 5.8 billion in dividends.
Speaker Change: Okay. Thanks.
Speaker Change: Okay. That's helpful.
Speaker Change: I actually wanted to ask about shell point, because sub servicing feels like an increasingly.
Um, you know, if you had that capital in you compounded that capital. It's my belief, I think the stock would be.
Speaker Change: Relevant driver of the earnings story at New raised I mean, I think you mentioned how much of sub servicing now maybe you can repeat that.
You know, in the twenties.
Or it should be anyway, so when we look at all that stuff, all the stuff goes into our calculation, but um I think anything's on the table.
Speaker Change: And what was the contribution to earnings from Shell point, and do you feel like Theres any growth opportunities there, even if mortgage rates stay around these levels.
You know, knowing, as we all know each other, um, if we could do something yesterday, I'd prefer to do it yesterday.
Speaker Change: New supply is limited.
Speaker Change: I mean.
Speaker Change: Look there continues to be.
That's very helpful. I appreciate it and I'll jump back in the queue.
Speaker Change: Demand.
Speaker Change: On different non agency products right non QM.
Thanks.
The next question comes from Eric Hagan with BTIG. Please go ahead.
Speaker Change: It's very very competitive in the marketplace today.
Speaker Change: We continue to be the number one special servicer for non QM assets.
Hi, thanks. Good morning guys, um, when we look to the investment portfolio and we strip out the leverage that's associated with the hedging of the MSRs. What, what is the leverage in that portfolio? How stable do you feel like it is there?
Speaker Change: So we.
Speaker Change: We continue to see growth there are opportunities with banks and existing relationships that we take market share based upon how they are positioning.
And you know, do you feel like there's even some room to apply more leverage if you know, new reds were to get spun out at some point.
Speaker Change: No.
Speaker Change: We do look at it as continued growth and you'll see that by us adding more loans.
Um, most of the, most of the balance sheet, but I would say today is is really around 22 asset classes, MSRs and um.
Speaker Change: In the fourth quarter and our pipeline continues to look strong in 25, So I think youre going to continue to see us taking market share, especially given a lot of the dislocation you saw last last year, and what I'll say third party servicing.
And, and our hedges in, in the mortgage company. So if you think about it, whether we whether we have swaps on whether we have treasuries on whether we have agency mortgages, that's a big chunk of, of the overall balance sheet, um, at the rhythm level the, you know, the other large part what I would say in the non-agency space is the Genesis um loans.
Speaker Change: Yes. Thank.
Speaker Change: Thank you guys. So much I appreciate it.
Speaker Change: Thanks, Eric.
Speaker Change: The next question comes from Jay Mccanless with Wedbush. Please go ahead.
You know, because, um, we finance those with some of our banks or insurance companies or do securitizations.
Jay Mccanless: Hey, good morning, Thanks for taking my questions.
Jay Mccanless: Two for me the first one just kind of a general market question for 25.
So the short answer is we could increase leverage. I think we'll only do that if we think it's.
Jay Mccanless: If you look at the MBA data mortgage credit availability is still.
Prudent, um, but I don't think we need to right now based on the earnings power of where we sit.
Jay Mccanless: Sitting at levels around 2012 2013.
Mhm.
Jay Mccanless: Do you guys think just in general maybe not simply for rhythm, but just in general do we think mortgage credit availability is going to increase.
OK, that's helpful. I actually wanna ask about ShellPoint because subservicing feels like an increasingly.
Relevant driver of, you know, the earnings story at new res. I mean, I think you mentioned how much you're subservicing now maybe you can repeat that, uh, and, and what was the contribution to earnings from ShellPoint and do you feel like there's any growth opportunities there even if mortgage rates like stay around these levels and.
Jay Mccanless: Going into this year or is some of that can be dependent what happens with the GSE.
Jay Mccanless: I mean.
Jay Mccanless: Look.
Jay Mccanless: Michael.
Speaker Change: <unk> talked about this on prior quarters, we have an expectation that.
New supply is kind of limited.
Jay Mccanless: Rates are going to stay elevated.
I mean
Look, they're, they're continues to be, you know, demand on, you know, different non-agency products, right? non QM, um, you know, it's very, very competitive in the marketplace today, uh, we continue to be the number one special servicer for non QM assets.
No.
Speaker Change: Youre going to continue to see us add consumers, obviously are going to.
Speaker Change: We'll have to deal with the affordability issue of trying to buy a new home.
Speaker Change: And that's why we're very much focused on our existing book.
Speaker Change: We continue to also see consumers looking to move so you see that in and the amount of inventory and housing inventory. That's available for sale continues to basically what I'll say is tick up so our expectation is you'll probably see a larger purchase market.
Um, uh, so you know we continue to see growth. There are opportunities with banks and existing relationships that we take market share based upon how they're positioning, so, um, we, we do look at it as continued growth and you know you see that by us adding more loans in the 4th quarter and our pipeline continues to look strong in 25, so I think you're gonna continue to see us, you know, taking market share, you know, especially given a lot of the dis
Speaker Change: And we think that home equity loans are going to continue to grow in and.
Speaker Change: And cash outs are going to continue to grow.
Speaker Change: Whether or not any of the government.
Speaker Change: Programs make an adjustment I don't really think that's going to be.
location you saw last last year in what I'll say third party servicing.
Speaker Change: Necessarily it 25 impact, but at the same time our belief is.
Yeah
Thank you guys so much appreciate it.
Speaker Change: They are very much focused on affordability and I think that whatever programs that they adjust theyre going to basically have.
Thanks, Eric.
The next question comes from Jay McCandless with Wedbush. Please go ahead.
Speaker Change: That as a focal point as well so.
Hey, good morning, thanks for taking my questions, um, 2 for me, the, the first one just kind of a general market question for 25, um, if you look at the NBA data, mortgage credit availability is still sitting at levels around 2012, 2013, um, do you guys think just in general maybe not simply for rhythm but just in general do we think mortgage credit availability is going to increase.
Speaker Change: There's going to be a little bit of a balance so I think thats mortgage credit availability overall is probably going to stay in.
Speaker Change: Its current state.
Speaker Change: Insurance is a problem obviously.
Speaker Change: I mean, the cost of homeownership is gone up rates and insurance is a problem.
Speaker Change: You just had the fire so.
Speaker Change: And that just drives into affordability considerations.
Uh, going into this year or is, is some of that gonna be be dependent on what happens with the GSE.
Speaker Change: Consideration as well.
Speaker Change: Okay, great. Thank you and then my second question.
I mean
Speaker Change: You guys talked at the beginning of the call about infrastructure finance and doing some investments there I guess with with some of the.
Look, uh, you know, my goal.
You know, is, you know, talked about this on prior quarters we, you know, have an expectation that.
You know, rates are are going to stay elevated, so um you know we're you're gonna continue to see is that consumers obviously are gonna um you know have to deal with the affordability issue of trying to buy a new home, um, and that's why, you know, we're very much focused on our existing book, you know, but we continue to also see consumers looking to move, so you see that in, in the uh amount of inventory and and housing uh inventory that's available for sale continues.
Speaker Change: Changes that we're seeing in the new administration, how does that affect your desire.
Speaker Change: Customer desire to do more investments in that space and are there any <unk>.
Speaker Change: Headlines insights roadmap whatever however, you want to phrase that anything that we should be watching for to tell us whether or not you guys are going to get more invested in that space.
Great question, it's a little bit early you heard this morning that the administration wants to ban deep sea.
So basically what I'll say is pick up so our expectation is you'll probably see a larger purchase market, um, you know, and we think that home equity loans are going to continue to grow and you know we and cash outs are going to continue to grow, you know, whether or not any of the government.
Speaker Change: I'm going to tell you that I am not the expert on this stuff I have two partners and we have two partners.
Speaker Change: We're likely going to join us.
Speaker Change: World Class.
Speaker Change: This around this everybody is talking about the multi trillion dollar investment opportunity in the huge needs for capital.
You know, you know, programs, you know, making adjustment. I don't really think that's gonna be, you know, necessarily a 25 impact but you know at the same time, you know, our belief is, you know, you, the they're very much focused on affordability and I think that, you know, whatever programs that they adjust are going to basically have.
Speaker Change: And that's how we're going to think about it I mean I think the world. This stuff is going to continue to change.
Speaker Change: But we knew that when when I look and I recently sat in some meetings with some of the extremely large.
Speaker Change: So called Hyperscale errors.
Speaker Change: It's a really really interesting space you got to have the expertise to do it and you got to have a lot of capital because.
You know that as a focal point as well so um you know it is gonna be a little bit of a balance so I think that mortgage credit availability overall is probably gonna stay, you know, in it's in it's.
Speaker Change: The World is short power.
Speaker Change: Whether it's AI or something else the world assured power.
Speaker Change: And with our team.
Speaker Change: Our partners.
Speaker Change: Extremely excited about where we could go with this.
Speaker Change: Okay that sounds great. Thanks, guys appreciate it.
Speaker Change: The next question comes from Matthew <unk> with Jones trading. Please go ahead.
Matthew: Hey, good morning, guys. Thanks for taking the question.
Speaker Change: So turning back to new raise.
Speaker Change: Funded volume has continued to increase quarter over quarter, you guys have had great growth there.
Speaker Change: Kind of within the non QM and home equity space, we've seen a lot of competition there and then theres a lot of other players stepping into the place are into the space. How do you continue to drive market share growth. There is it investment in your team.
Are you guys growing that out could you just speak to that a little bit. Thanks.
Speaker Change: It's an investment in the team its investment in our technology, it's an investment in our brand.
Speaker Change: Those are the three key initiatives across the board right. We continue to believe there's significant upside.
Speaker Change: For us on just focusing on our own homeowners, we haven't even really if we felt like we wanted to get into new customer acquisition.
Speaker Change: And we do new customer acquisition on our distributed retail platforms, but.
Speaker Change: But like on our.
Speaker Change: On our call centers, it's really just focus internally on our own portfolio and making sure that we're maximizing there. So I would tell you unequivocally we are making significant platform investments on all all of those initiatives.
Speaker Change: Got it that's helpful. Thank you.
Speaker Change: This concludes our question and answer session.
Speaker Change: I'd like to turn the conference back over to Michael Nierenberg for any closing remarks.
Michael Nierenberg: Well, thanks for everybody's questions really thoughtful this morning.
Michael Nierenberg: Obviously very excited about where we sit as a business in.
Michael Nierenberg: All of our different business lines and look forward to updating you after Q1.
Michael Nierenberg: More to come and have a great day and a great.
Michael Nierenberg: Great rest of the week.
Michael Nierenberg: Thanks, everyone.
Michael Nierenberg: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.