RITM

Overall Firm Strategy & Positioning

• The firm delivered strong results in Q2 despite broad market volatility, highlighting the strength of its diversified platform, experienced investment teams, and risk-first culture, aligned with its fiduciary responsibility to clients and shareholders.
• Total firm-wide investable assets now exceed $100 billion, split between ~$50 billion on-balance sheet and $61 billion in third-party AUM, with over $1 billion in permanent capital. The firm co-invests its own capital alongside third-party LPs in all funds, aligning incentives.
• Core strategic priorities are to create value for limited partners and shareholders, expand product offerings in high-expertise real asset and credit segments, and prioritize performance over raw AUM growth.

Asset Management Growth

• Third-party asset management has grown from effectively $0 in 2023 to $61 billion today, with continued gross inflows across core product lines. Active fundraising is focused on asset-backed finance (ABF), direct lending, capital solutions, multi-strat, stabilized core real estate, and real estate credit.
• New product lines in development include insurance solutions, infrastructure, and private wealth distribution in partnership with banking partners. The firm only enters new segments after building in-house expertise.
• Capital deployment is disciplined: the firm only deploys capital into opportunities with attractive risk-adjusted returns, and does not deploy capital for growth's sake.

Elecor Properties Operational Progress

• The Elecor office portfolio was acquired at a 75% discount to current replacement cost in high-barrier, supply-constrained markets (New York Midtown, San Francisco), with very limited new office development currently underway. The low cost basis enables capital investment for upgrades to drive future rent growth.
• The firm is executing a $multi-million capital improvement strategy across four key assets (2 in New York, 2 in San Francisco) to add premium amenities, upgrade building systems, and reposition spaces, which is expected to drive occupancy and rent growth starting in 2026 and beyond.
• Flight-to-quality trends are benefiting well-located, well-amenitized Class A office properties, with growing tenant demand in both core markets. The firm is actively targeting JV partnerships for individual assets to bring in third-party capital.

Genesis Capital Competitive Advantages

• Genesis is the #2 U.S. residential transitional lender, with a risk-first underwriting culture that has resulted in an industry-leading low delinquency profile. Demand for its short-duration (1-3 year), high-coupon products is extremely high from institutional investors including insurance companies and third-party funds.
• The segment benefits from the firm's integrated platform: originations feed both the firm's balance sheet and its third-party fund offerings, creating multiple avenues for growth. Market share remains low, leaving significant room for expansion.

Newrez Technology & Efficiency Initiatives

• Newrez is investing in proprietary ReziAI technology and partnerships with Valon and Home Vision to improve origination and servicing efficiency, deliver better customer experiences, and reduce operating costs. The transition to the Valon servicing operating system is on track for early 2027, with expected annual cost savings exceeding $65 million.
• Newrez is expanding its consumer product offerings to include home rewards, insurance, and personal loans, to increase customer lifetime value and retention across its 4+ million homeowner base.

• The firm expects third-party AUM to double over the next 1-2 years, with growth driven by strong performance and expanded product offerings, rather than reckless AUM growth. Management specifically sees a clear path to doubling Genesis Capital origination volume within 1-2 years, with potential for tripling long-term.
• Full-year 2026 mortgage origination volume is projected to reach ~$65 billion, in line with prior forecasts, aligned with industry mortgage volume projections from the MBA.
• Approximately 70% of Sculptor's annual incentive fees are typically recognized in the fourth quarter, with off-cycle crystallization (like the Q2 2026 recognition) being irregular. Core run-rate earnings available for distribution (after backing out one-time items) is projected to hold around $0.50 per share.
• Post full technology integration at Newrez, cost per loan is forecast to fall to 50% below the industry average, with annual servicing cost savings expected to exceed $65 million after the 2027 Valon platform transition.
• Management expects continued occupancy and rent growth at Elecor Properties through 2026, driven by capital improvement projects and strong flight-to-quality tenant demand for Class A office.

1. Asset Management: Third-party AUM reached $61 billion, growing at a 28% CAGR, with 71% of AUM classified as longer-term. The Sculptor multi-strat fund delivered an 8% year-to-date return through Q2 2026, a 12.3% annualized 3-year return, and realized off-cycle incentive fee crystallization in the quarter. Total firm-wide investable assets exceed $100 billion. 2. Elecor Properties (Office Real Estate): Portfolio totals 9.9 million square feet across 10 core Class A assets (7M sf in New York, 2.9M sf in San Francisco), with an overall 86.5% occupancy rate as of Q2 end. New York portfolio occupancy reached 91.6%, while San Francisco occupancy rose 6% quarter-over-quarter to 64.9%. Year-to-date 2026 leasing activity hit 681,000 square feet at a weighted average rent 21.4% higher than 2025 full-year transactions, with 62% of activity occurring in San Francisco. Since acquisition, the firm has realized $44 million in annual operating expense efficiencies. The segment closed a $283 million CMBS financing in Q2, with an additional post-quarter refinancing completed to extend loan maturities. 3. Genesis Capital (Residential Transitional Lending): Q2 2026 origination volume hit $1.9 billion, with pretax income of $42 million (equal to full-year 2022 pretax income) and 26% quarter-over-quarter pretax income growth. The segment delivered an annualized operating ROE of 17%. Portfolio composition is 50% construction loans, 34% bridge loans, 12% renovation loans, with a 63% average loan-to-after-repaired value and 68% average loan-to-value, and an extremely low delinquency rate. Full-year 2026 origination is projected to reach ~$6.5-$7 billion, up from $1.7 billion in 2022. 4. Newrez (Mortgage Originations & Servicing): Q2 2026 pretax income (excluding mark-to-market adjustments) was $308 million, up 12% quarter-over-quarter, delivering a 22% quarterly ROE. Funded origination volume reached $15.9 billion, up 1% quarter-over-quarter, with 40% of volume coming from higher-margin wholesale non-agency and consumer direct channels (up 11% quarter-over-quarter). Co-issue MSR acquisitions hit $5 billion, up 45% quarter-over-quarter. The overall MSR portfolio (owned + third-party) totals ~$865 billion. The third-party servicing business added 8 new clients and $27 billion in new loan boardings in Q2. Current cost per loan is 1/3 below the industry average, with a target of 50% below average after full technology integration.

• Broad market interest rate volatility and the expectation of higher rates for longer creates convexity risk for the MSR portfolio, reducing room for error on MSR investments relative to historical levels and requiring disciplined hedging.
• Elevated competition in mortgage originations puts pressure on gain-on-sale margins, requiring continued pricing discipline and a focus on higher-margin segments to maintain returns.
• There are ongoing headline and policy headwinds in the single-family rental (SFR) space that have created some uncertainty for SFR-focused lending, leading the firm to prioritize multifamily lending growth in the near term.
• Office real estate market weakness continues to impact overall sector sentiment, even as high-quality Class A assets in core markets see improving demand, which could create near-term valuation uncertainty for the Elecor portfolio.
• Operational execution risk remains for large technology transformation projects at Newrez, with full efficiency gains from AI and platform transitions not yet fully realized.

Q: How will asset management growth be split between on-balance sheet funding and third-party capital over the next 1-2 years, and is there potential for JV partnerships for Elecor properties? / A: Management sees significant room for third-party AUM to double over the next two years, prioritizing growth of the funds business over on-balance sheet retention. A larger share of Genesis originations will be funded by third-party capital going forward, which is more optimal for Rithm's REIT capital structure and dividend profile. For Elecor, the firm is actively pursuing single-asset JV partnerships, with a deal for 1301 Sixth Avenue expected to close by the end of Q3 2026, and expects to add more third-party partners to grow the office platform over time.

Q: What has driven the strong origination growth at Genesis Capital, and why is it outperforming peer lenders? / A: Genesis growth is driven by extremely high institutional investor demand for its product: short-duration (roughly 2-year) loans with 8% coupons and mid-teens levered returns, which are particularly popular with insurance companies. The firm has expanded headcount significantly since acquisition and invested in AI/technology to improve underwriting and execution, and the integrated platform allows Genesis to feed loans to both on-balance sheet and third-party fund strategies, opening up more capacity for growth. Management sees a clear path to doubling or tripling the size of the business.

Q: What are your observations on current MSR market pricing, and has the market priced in the efficiency gains from new AI and mortgage technology? / A: Management notes MSR assets are currently priced very high with negative convexity and limited room for error, offering unlevered returns in the upper single digits, making the firm more cautious on new large acquisitions than some peers. While AI and technology will deliver significant efficiency gains for the industry, these gains have not yet been fully realized or priced into the market. Rithm expects to capture significant cost savings from its upcoming transition to the Valon platform, putting it ahead of many peers on operational efficiency.

Q: Given your stock trades at a large discount to book value, would the firm consider increasing share buybacks or raising the common dividend? / A: Management is not satisfied with the firm's current valuation, but prefers to retain and redeploy capital to grow the business long-term rather than returning it via buybacks or dividend increases. As a REIT, the firm already pays a $1 per share annual dividend with a 10.6% yield, and needs capital to fund the growth of its high-return asset management and origination businesses. The firm will only consider buybacks if it successfully brings in significant new third-party capital to fund growth, which is not expected in the near term.