Rithm Capital, the parent company of mortgage lenders Newrez and Caliber Home Loans, is expanding its business to Europe. Former Bank of America executive Marty Migliara has been tapped to lead the operations in the region.
Rithm, a New York-based asset manager, is opening an office in London to seek equity and debt investments across the real estate and consumer finance sectors, the company announced on Monday.
“The ongoing dislocations in the markets should enable us to generate attractive risk-adjusted returns for LPs and shareholders,” Michael Nierenberg, president and CEO of Rithm Capital, said in a statement.
The company’s move was expected. Executives said during a call with analysts in early February that Rithm had plans to expand to Europe in the second quarter of this year.
During the call, Nierenberg said Rithm was looking for more “situations around distressed debt in Europe.”
According to the executive, the company will likely raise some capital around the European business to invest in the region.
“More likely in private funds. But I think initially it could come out of the public company,” Nierenberg said.
Rithm has a $32 billion balance sheet.
Recently hired by Rithm, Migliara was the former head of Europe, Middle East and Africa origination and lending in BofA’s global mortgages and securitized products team. Migliara is a veteran of asset-backed securities, consumer lending platforms, and residential and commercial real estate.
Regarding his decision to join Rithm, Migliara said “the timing could not be better, given the interest rate environment and the tightening of credit conditions in Europe.”
“We will have great opportunities to provide growth capital to strong origination platforms and opportunistic capital to facilitate the upcoming refinancing needs across the commercial real estate in the region,” Migliara said in a statement.
Rithm spent 2022 in “conservative mode,” in which executives played it cautious with capital deployment and reduced expenses amid surging interest rates in the U.S. The strategy paid off: Rithm delivered an $864.8 million profit in 2022 — higher than the $705.5 million the prior year.
In the mortgage business, the company had a combined pre-tax income of $23.9 million in the fourth quarter of 2022. Rithm spent part of 2022 integrating its mortgage companies — Newrez and Caliber — and cutting 56% of its workforce. Its performance last year relied on the servicing portfolio.
In December, Rithm acquired a 50% share of Senlac Ridge Partners, later renamed GreenBarn Investment Group. The partnership will accelerate GreenBarn’s strategy of building a vertically integrated and diversified commercial real estate debt and equity business.