Rithm Capital, the parent company of multichannel mortgage lender Newrez, has struck a deal with an institutional investor to potentially acquire up to $1.5 billion in residential transitional loans (RTLs). 

The asset manager announced the agreement on Tuesday but did not disclose the name of the institutional investor. RTLs are short-term loans designed for real estate investors who aim to fix and flip or construct residential properties.

Through a dedicated investment partnership, the parties will fund the acquisition, with an initial target of $500 million. Rithm Capital Advisors LLC will manage the funds, while Genesis Capital LLC—Rithm’s subsidiary focused on RTL lending—will service the loans.

Rithm has taken steps to diversify its business from a real estate investment trust (REIT) into a global asset manager. Its operating companies include origination, underwriting and servicing capabilities.

The company sees opportunities to capitalize “on the compelling opportunities that exist in the growing residential transitional loan sector,” said Michael Nierenberg, chairman, president and CEO of Rithm Capital.

According to Nierenberg, this is an “important step in the continued growth of our funds business, reinforcing our commitment to expanding Rithm’s asset management capabilities.” 

Rithm remains a profitable enterprise. In the first quarter of 2025, the company reported $80.7 million in net income, down from $291.9 million in the previous quarter.

It has also been active on the M&A front. In 2023, it acquired $1.4 billion in consumer loans from Goldman Sachs, completed a $720 million purchase of Sculptor Capital Management and struck a deal for Computershare Mortgage Services and its subsidiary, Specialized Loan Servicing.

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