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spk03: Hello and welcome to the Rhythm Capital First Quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to hand the call to Emma Bola, Associate General Counsel. Please go ahead.
spk02: Thank you and good morning, everyone. I would like to thank you for joining us today for Rhythm Capital's First Quarter 2024 earnings call. Joining me today are Michael Nierenberg, Chairman, CEO, and President of Rhythm Capital, Nick Santoro, Chief Financial Officer of Rhythm Capital, and Baron Silverstein, President of NUress. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rhythm Capital website, .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 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 be discussing some non-GAAP financial measures during today's call. Reconciliation 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.
spk04: Thanks, Emma. Good morning, everyone, and thanks for joining us. As you look at our business, another very solid quarter for Rhythm and, quite frankly, all of our operating companies. All of our business lines performed extremely well. With the recent backup in rates, the market should provide us with great opportunities to deploy capital and generate and continue to generate outsized returns. Regarding risk, we are much closer to home from a duration perspective. With FedSpeak, early in the quarter and, quite frankly, late last year, targeting lower rates, throughout the first quarter, we hedged most of our MSR risk or MSR positions. What this should do for the company is continue to create stability and earnings as well as book value on a go-forward basis. As everyone knows, we set out on a mission to grow our alternatives business. To be clear, this is not just in size, but, more importantly, excellent risk-adjusted returns for our shareholders and LPs. Sculptor, during the quarter, continued to deliver strong results across the platform. What we are seeing in terms of risk reward and credit markets are some of the most attractive levels we have seen in years outside of financial crisis levels. The Multistrat Fund continues to generate strong returns while maintaining conservative risk posturing. The real estate group, which focuses on non-traditional niche asset classes, continues to generate excellent returns. Their track record, when you look at the numbers, is unparalleled relative to others in the marketplace. In the first quarter, we announced the launch of Sculptor Loan Financing Partners, the firm's first captive CLO equity investment platform. This was anchored by a commitment from Rhythm. In the quarter, we priced two CLOs, one in Europe and one in the U.S. As you think about all these comments, we're super excited where we are with the business and the prospects for the future. At Nures, our mortgage company, Baron and the team did a great job during the quarter. We had excellent results both in the servicing segment as well as in the origination segment. We look forward to closing the SLS transaction, which we announced late in the fourth quarter, which will add significant third-party business to the platform. Our Genesis business, which is our transition loan business, had its best origination quarter ever. Not only are volumes up as banks retreat, the addition of new clients to the platform has never been higher. I think we originated loans to 66 different counterparties during the quarter. Also, we completed a $500 million rated securitization in the quarter, lowering our cost of funds by approximately 150 basis points as well as we achieved higher advance rates. All of these are very exciting things for our business and we look forward to updating you along the way. I'll now turn to the supplement, which has been posted online. On page three, when you look at where we are today, this is one thing I want to highlight on this page. Aside from the sheer scale of our business, the balance sheet at rhythm today is higher as a result of the hedges that we put on during the quarter against our MSR business. During the – when you look at life to date, $5.3 billion of dividends paid, $7.1 billion of equity and our total economic return since inception is 184%. Sculptor on the right side of the page, $32 billion of AUM. During the quarter, GatNet income $262 million or $0.54 per diluted share. Our earnings available for distribution, $233 million or $0.48 per diluted share. Our common dividend at $0.25, cash and liquidity at the end of Q1 was $2 billion and the total economic return for Q1 is 4.5%. As you flip to page five and you look at where we – when this company was first started, just a quick snapshot and going back in history, companies started in 2013 at Fortress to take advantage of dislocations in the MSR market as banks were selling MSRs to Basel III capital constraints. So we started the business with a billion of equity. Today we're at $7.1 billion. What started out as strictly an owner of excess MSRs today is a full-scale asset manager with capabilities in credit, real estate, obviously all kinds of lending businesses and – as well as in the mortgage space. As we go forward, we look forward – as we go forward, you know, we will look to increase our scale in our ALTS business. We will look to add insurance over time. As we think about our offerings, we'd like to tap the retail markets and we'll continue to tap the institutional markets. So a lot of exciting things hopefully ahead for Rhythm and our operating companies on a go-forward basis. To one activity, if you flip to page six, you know, when you look at what we did on the New Red Side, Baron's going to talk about the mortgage company in a bit here. The origination platform continues to grow market share. We've had organic growth in the third-party servicing franchise. That's due to both the SLS side as well as just, you know, quite frankly, our excellence in the servicing business with clients that we know and that we already service loans for. As you think about where the banks are, you know, with the regional banks retreating, the Genesis business, as I pointed out earlier, had a record quarter in origination. You know, they're on target to do – it looks like we're on target to do about $3 billion in origination. When we first started the platform, I think we were in and around $2 billion. When you look at the credit markets, during Q1, we issued $775 million of senior unsecured notes. We also tendered for 50% of our outstanding issue. So we currently have $275 million of outstanding senior unsecured notes, which are due in 25. When you look at the Sculptor platform, again, the CLO – the captive CLO equity investment platform, we ceded that. Obviously, there's third parties. Every time we do a CLO deal, there are third parties that buy the CLO equity. When you look at our investment in Sculptor and in this platform, I think that on a go forward basis, this is only scratching the surface, what we could all do together. When we look at performance, strong risk-adjusted returns of both Rhythm and Sculptor platforms, we lead with performance. With performance, we're going to see more AUM come on our platform. And then when we look at partnerships, we continue to expand our global reach and try to create capital solutions with different LPs and shareholders on a go forward basis. Sculptor, page seven. Just a couple of highlights here. Again, total AUM, $32 billion. The credit business between credit and real estate is $24 billion. Of that $24 billion, roughly $15 billion, you can look at in the CLO business. The company has been outstanding for many years. Over the course of the past, I think the company started something in 1994. When you look at AUM today, at $32 billion, and you look at the acquisition which closed in November of 23, we're just super excited where this platform is going to go. When you look at overall returns on page eight on the Sculptor, on the platform between credit, real estate, and the multi-strat fund, quite frankly, I think our returns are second to none. Both the credit markets, the real estate markets, and what we're doing overall, I think, are we're in a position today to truly execute some of the best investing environments that we've seen in many, many years. On the New Rest site on page nine, delivered 23% ROEs. Huge numbers, quite frankly. PTI, ex mark to market increased by 22% quarter over quarter. The servicing business continues to perform extremely well. From a UPB standpoint, we grew the servicing business 15% year over year. I know at some point when we get into Q&A's, there'll be some questions regarding going out and buying bulk packages. We'll address that. Quite frankly, between where we are today and as we get through more slides here, you'll see that between our subservicing business, or really our third party business in own servicing, we have $850 billion-ish of MSR exposure in the house. This is not a race to get bigger. This is a race to generate more earnings. When you look to the right side of the page for the quarter, servicing excluding market, $220 million. Our MSR mark to market was $195 million. Originations made $42 million. Obviously, with corporate expense, the net number there is $408 million. Great quarter, great job done by the team overall. On Genesis Capital, I pointed out before, record originations, $840 million in commitments, 66 different sponsors. The business continues to perform extremely well. First quarter ROE, something between 13 and 15%. New clients continue to come to the platform as the banks continue to pull back in the areas that we operate. Finally, what we'll do is let's get into the segment performance. I'll just take page 13 and then Baron's going to take the mortgage company stuff. On the servicing portfolio, again, $157 billion of total servicing. When you look at our earnings stream and you think about where we are today as a business, you couple that with the Sculptr platform, the alt side, and you think about earnings in the platform, the ability to make investments, whether it be at the Sculptr level or other things that we're going to do over the course of time. I truly believe there is a huge growth opportunity for us. Again, it's not just an AUM thing, it's just real earnings that we're going to generate for shareholders and LPs. Total owned servicing, $572 billion of that. 99% of the portfolios added the money. Gross whack on our total portfolio, I think, is something around $390 right now. The SLS acquisition adds $150 billion of servicing, of which $100 billion of that is third-party servicing. With that, why don't we go to page 15 and I'll turn it over to Baron and I'll take it from there.
spk06: Good morning and thanks, Michael. As Michael mentioned, just another good quarter for us as we continue to grow on the foundation that we've built over the last few years. Our core focus is on strategic growth and continued cost leadership. We've executed on synergies across all of our platforms. We've internalized most of the rhythm third-party servicers. We unified our brand strategy and we're now focused on growing our business, growing our platform, and then modernizing our customer and employee experience through digital and AI initiatives. On slide 16, on our servicing business, our servicing business does continue to perform well. Michael mentioned we're expecting to close the SLS acquisition in the second quarter, and it's going to add an additional $149 billion of owned and subserviced MSRs while adding co-issue MSR acquisition capabilities. Away from a SLS, we continue to see additional opportunities to gain market share, including picking up wallet share with our existing third-party customer base, and we continue to evaluate MSR bulk packages, but there's also other strategic acquisitions we look at as well. Overall, the consumer also performs well with muted prepayment speeds and historically low delinquencies. Across it all, we remain focused on maintaining operational excellence and cost management, even after adding 1 million loans onto the platform last year and an expected additional 700,000 loans with the SLS transaction. Going to slide 17 on the business, we grew Origination's overall 21% quarter over quarter while also increasing margins, both of which were driven by our correspondent channel. We have strong momentum in our non-agency products, originating over 185 million of non-QM loans in the first quarter, almost back to levels we were seeing in 2022 on a quarterly basis. While our home equity originations were also up 70% a quarter over quarter with approximately 81 million in funded volume, but we expect to see increasing growth in our home equity originations also coming into the months and quarters to follow. Our retail channel, including our JV, after the moves we disclosed we made in the first quarter, was able to break even in the first quarter, which is a big win for us and I would say for our team across our entire platform. While the home purchase market continues to show positive signs, regardless of interest rates, we have significant upside in growing our purchase market share through retention strategies, which began with our new REZ home rewards program that launched in February. On slide 16, we like the rest of the industry view AI as a technology that will have a transformative impact on our scaled business. We have an incredible amount of data across our entire platform and while our AI platform branded REZ is in its early days, currently focused on employee education and onboardings, but we see a broad application through originations and servicing. We also believe our proprietary technology is a strategic advantage, allowing us to be nimble, control costs, while delivering custom solutions to our enterprise clients. While we always remain focused on expense management, our near-term AI initiatives are driven by applying the best customer experience, which in turn will create future efficiencies. We're really just starting to tell the new REZ story more broadly and on a final note, we will be hosting an investment community day to dig in further on our business and more details can be found on the RhythmCap website. Back to you, Michael.
spk04: Thanks, Baron. Good work. Just a couple last slides for me and then we're going to open it up for Q&A. On the Green Barn side, just so everybody knows, you know, David Welsh and David Chambron in that team, there's 25 investment professionals. At this time, when we do investments off the Green Barn shelf, typically it's done on the Rhythm Balance Sheet, so I would think of it as a rhythm-related investment strategy right now on commercial real estate. We do not have any legacy commercial real estate in the house, so things there are, you know, as we see opportunities and want to deploy capital on the Rhythm Balance Sheet, we will do so. Adore, just to touch on our single-family rental strategy, 4,200 units. You know, the name of the game there is scale. I think that the growth in the Adore, I know that the growth in the Adore business will come in a so-called co-investment fund alongside our public company where we have about 200 million of equity capital committed to that business, but you need significant scale there and we continue to be, what I would say, thoughtful as cap rates, where we think cap rates are going and where we think we could deploy capital overall in that business. And then finally, on the portfolio side, on the consumer loan business, you know, we do opportunistic investing in consumer loans. Everybody knows, you know, in June or July of 23, we bought a billion for consumer loans from Goldman. That billion for, just to give you a sense, is now down to 800 million. It amortizes extremely quick. I think that, you know, the life of that capital will probably be over the next, you know, one and a half to two years. So, overall things from a portfolio standpoint, extremely stable, extremely good. Business is performing well, quite frankly, everywhere. And with that, we'll turn it back to the operator for Q&A.
spk03: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. And our first question comes from Boaz George of KBW. Please go ahead.
spk10: Hey, everyone. Good morning. Could I get an update on book value quarter to date? You noted that the hedges had taken the balance sheet up. So, yes, just an update would be great.
spk04: We're in and around 1230 to 1240 right now, Boaz. You know, during the quarter, we still have a little bit of a short bias, but overall, I would say as the market continues to sell off, if it does, what you're going to start to see is obviously MSR values will be capped. I've said this for a long time. I think last quarter, we had a very conservative mark on our MSRs as well as I think where we are today. But what you're going to see is a backup in rates will, you know, at some point, the duration flips from negative duration to positive duration. So we have to all be pretty thoughtful of that. But right now, it's 1230 to 1240.
spk10: Okay, great. That's helpful. Thanks. And then I wanted to switch and get any updated thoughts on the timing of any potential spin. And also, does the remaining company need to be any larger in terms of scale or is it more just the right market conditions for you to do something?
spk04: Well, I think when you look at the mortgage company, you know, when you look at a couple of our peers out there, they're trading above book. So clearly, we look at where we are and we trade below book overall. So, you know, what we're trying to do is obviously we need to assess capital, the amount of capital that's in each segment of our business. But as we evaluate whether to take this company public, whether it be a spin or just or take it public, it's still what I would say is work in progress. What we're really trying to do if you think about the power of our franchise, the earnings from our overall investment business, including the mortgage company, create significant advantages for us to be able to make investments in other things that we may want to do that are non-mortgage related. So to give that up today, we're not sure that that's the right thing, but we continue to evaluate that and work with our advisors on which way we're going to go with it.
spk10: Okay, makes sense.
spk04: Thanks. Thanks.
spk03: Next question comes from Eric Hagan of the TIG. Please go ahead.
spk09: Hey, hey, good morning, guys. Hope you're well. I'm just looking at the results in Sculptr. I mean, when do you expect that might improve and, you know, turn positive? And do you have a target rate of return for the investment in the CLO equity that you made in Sculptr?
spk04: The here, there's a couple ways to think about this. One is the enterprise value that we're creating by making investments in the Sculptr franchise should lead to a higher overall equity valuation for Rhythm at the parent level. So in other words, as we grow our CLO business and we create management fees for Sculptr or we make investments in other things, whether it be alongside Sculptr or actually in Sculptr, what that's going to do is increase the value of Sculptr. So that's part one. Part two is when you look at the earnings, the earnings are going to be lumpy for now. Typically, when you look at whether it be the multi-strat fund or you look at some of the other funds that Sculptr has, you'll see earnings when you have realizations. Most of the earnings, I think, you're going to see at least for 24 are going to be geared towards the fourth quarter. And then obviously with more with the results, as good as they are, as in as we think about the business, that'll continue to hopefully bring more AUM back to the platform. And then you're going to see the real lift in not only enterprise value at the rhythm level, but also at the platform level at Sculptr.
spk09: Yep, that's really helpful. Really helpful. Do you feel like the equity in the investment portfolio is relatively stable at this point? And what could get you to maybe direct more capital there, even ahead of a spinoff? And how would you maybe allocate the preferred equity in the capital structure among the different segments of the portfolio at this point?
spk04: So on the preferred equity, you're referring to the four series that we have outstanding?
spk09: Yeah, exactly.
spk04: Yep. You know, we have two that are going to reset this year. Well, likely, you know, those are being addressed. You know, when we look at capital, you know, we ended the quarter with $2 billion of cash on liquidity. Today, it's a tad lower. We're going to fund SLS here, hopefully, extremely short, you know, in the near future. You know, we'll deploy capital when we think that we have the right risk adjusted return. You know, I pointed out earlier in my opening remarks, the credit markets today look as good as they've looked in years. You know, the high yield indexes, I think, is in and around 360. And when you look at absolute yield levels, and what we're able to achieve, it's a pretty ripe environment for us to deploy capital, whether it be in the mortgage market or just other things. So we'll continue to be opportunistic. We obviously we have a lot of things that I think are bigger from a corporate perspective, not necessarily a short term, but more in the long term, how we create, you know, a true global asset management business. And that's really where we're focused alongside with operational excellence in our mortgage company and Genesis and the other things that we have on, you know, in the company. On the preferreds, you know, again, getting back to that, we'll address the series that are coming up here in the near future.
spk09: Yep. Thank you guys for the perspective. Appreciate you.
spk04: Thanks, Eric.
spk03: The next question comes from Doug Harder of UBS. Please go ahead.
spk11: Thanks, Michael. As you think about the transition to kind of more of an asset management model, you know, how should we think about the timing and or which of the business lines, you know, we'll see third party capital raised first.
spk04: You know, the I mean, the Scrippler franchise is, is obviously there's 32 billion of AUM at franchise. You know, when you look at the leadership team there between Jimmy and, you know, Brett Klein on the on the credit side and Steve Orbach and Nick Hacker at the real estate side, it's a great team. I mean, it hasn't been easy, obviously, to raise the money going back to past couple years because of the noise around the platform. That's why we are, you know, that's why we have the platform, quite frankly. But when you look at where, you know, the actual performance and what that's going to lead to over the next couple years, we're super excited as far as bringing more money into the credit strategies, the real estate strategies, and as well as the multi stress fund. So the returns are good. I think returns are going to bring in more capital and that's going to be from both existing LPs and hopefully from a bunch of new LPs. You know, there's a lot of marketing that continues to go on around the platform. So, you know, it's going to flow, it's going to take a little bit of time here. But performance is going to bring in new pools of capital for sure.
spk11: And I guess just on Sculptor, can you just talk about, you know, how retention has gone since the deal closed relative to your expectations?
spk04: Great. You know, we've lost, you know, a couple bodies, but that's to be expected in any kind of acquisition. We've added new talent. You know, there's a lot of what I would call incoming resumes that want to join the platform, whether it be at the Sculptor level and or at the rhythm level, people are excited where we are and what we're doing. So I don't, you know, there's no, there's no lack of anything. The investment team is solid and the results are solid as well. So no issues whatsoever on the retention side.
spk11: Great. Thank you.
spk04: Thank you.
spk03: The next question comes from Stephen Laws of Raymond James. Please go ahead.
spk08: Hi. Good morning. Michael, I guess to start, can you talk about, you know, with mortgage rates moving back towards highs, you know, what you're seeing in the pipeline there, sensitivity of borrowers to rates moving where they are and, you know, kind of outlook for volumes near term and how you see that progressing through the year?
spk04: Barry, you want to hit that mortgage rates higher?
spk06: I mean, the market remains predominantly a purchase market, right? So, you know, for us, it's about, you know, delivering excellent service to our customers and then making sure they understand, you know, who we are as a company and what we can otherwise deliver either through, you know, products or quality service. And, you know, we think we have a lot of upside in our customer retention from an origination perspective. And as I mentioned in our talking points, we, you know, will remain opportunistic through all of our different channels, you know, for either, you know, ongoing growth. And, you know, we're not going to basically, you know, look at the market and, you know, Michael's used this term, fight the Fed. But the market interest rates being higher, we're going to remain nimble and very, very cost efficient in our origination business and cost efficient on our servicing business. And that way we can perform in every market.
spk08: Great. And then, I think, here's a little bit, can you touch on the announcement with Great Ajax and what you envision there and how you think about, you know, fees benefiting a rhythm with that relationship?
spk04: Yeah, a great question. As we look at Great Ajax, it's a platform that's going to be externally managed assuming that shareholder vote is affirmative for us. And the idea there is to grow that into a commercial, publicly traded, commercial real estate REIT that has no legacy commercial real estate exposure with the management fees that will flow into NUCO, which will be a management company. And I think that is the start when you think about Sculptor and fees that are going to be generated over the years that will flow into a management company. You think about Great Ajax, some of the other things that we have on our plate today, that's really the goal. But it's really going to be a clean platform, probably something between, call it 250 million of equity that will be investing in commercial real estate, you know, with a teens type mandate, and it'll be a clean platform relative to the some of the other folks. A lot of work to do on that one, but that's the intention.
spk08: Great. Appreciate both your comments this morning.
spk04: Thank you.
spk03: Once again, if you would like to ask a question, please press star then one. And our next question will come from Jason Weaver of Jones Trading. Please go ahead.
spk07: Hey, good morning. Michael, you mentioned in your prepared remarks you are anticipating it, but can you talk about what you're seeing about incremental returns on the MSR, on MSRs out there right now, as well as if you're looking at anything closer to the current production coupon?
spk04: So here's how we evaluate the MSR business. We don't, you know, as I pointed out, we've been doing this a long time. We see a lot of bulk packages. A lot of them are small, you know, when I say bulk. There was a couple large from Wells that went back over the course of the past year. You know, when we look at where we can produce an asset versus where we could buy an asset, if we think we could produce the asset at a cheaper level, we're obviously always going to do that because you're creating, we should be creating enterprise value around our mortgage company versus just going out and buying an asset. So our whole theme is as we create more enterprise value, that goes to Sculptor, that goes to the mortgage company and other things that we're going to do around some of our other subs or business lines. As we evaluate whether it be lower coupon MSRs or it's all just a total return for us. If we could buy an MSR at an unlevered 10 and with a little bit of leverage, it's a 12 versus buying a distressed commercial real estate asset at a 15. Obviously, we're going to opt for the thing at a 15. But everything is, you know, when we look at where we are today and the capabilities we have between credit and real estate and origination, you know, we have it all. We don't have insurance, but everything's going to be total return oriented how we think about investing in MSRs or some other asset class. We generically, obviously, organically, should say manufacture MSRs with every loan that we create. And then we'll just evaluate that versus where we can buy that in the secondary market. Okay, thank you. Just keep in mind MSR values, you know, overall, weighted average mark, give or take five for the industry right now. As if rates did sell off another 50 or 100 basis points, at some point that duration becomes capped or you get longer. So it's just something to think about, you know, in that asset class. Understood. Thank you.
spk07: And then on the Genesis business, I was wondering if you could provide a little bit more context around the greater sponsor demand you noted, you know, given little relief on the rate front this far this year, is this really just a function of banks really getting out of that business?
spk04: I think it's both, actually. I think, you know, listen, banks are always a little bit hesitant around the construction angle. You know, when you look at our overall business line, think about it this way. Somebody comes to us with a development of multi- or call it single-family rental. Genesis will go out and make that loan on the single-family rental side. Or Genesis, I'm sorry, they'll make that loan to the sponsor who are then going to construct single-family rental homes. A door or a single-family rental business will then buy those homes and then get them leased up. So we're seeing a lot more of what I would say cross-platform origination today than what we've done in years past. And as you look at Genesis, when I say there's 66 different sponsors, yeah, the banks are pulling back a little bit, but the team itself is doing a great job in kind of broadening the sponsorship. When we first bought this business, the amount of concentration with one large sponsor was, I think, around 25%, 25 or 30%. Today it's so spread out. And when you think about where you are from a risk-adjusted basis, you were in a much, much better place today than I think we were when we actually acquired the platform from Goldman.
spk07: All right, very helpful. Congratulations on the results. I'll hop back in the queue. Thank
spk03: you. The next question comes from Trevor Cranston of JMP Securities. Please go ahead.
spk05: Hey, thanks. Good morning. You know, you guys have talked a lot about growth opportunities across the entire platform, you know, some of which are, you know, non-REIT investment portfolio opportunities. I guess when you think about the overall capital deployment that you guys have and the return opportunity out there, can you sort of give us an update on how you think about the dividend level for the overall company in light of all that?
spk04: Thanks. So the dividend, obviously we outperform our dividend and hopefully we'll continue to do that quarter after quarter. You know, the calculus for us is if we could deploy capital at a, you know, 12, 13, 14, 20% return, use 15 on average, if we deploy capital at a 15% rate of return versus a dividend yield of nine or something around that, everything we do from an investment standpoint is going to be highly accretive versus giving money back. So that's how we think about it.
spk05: Okay. Appreciate the comments. Thank you.
spk04: Thank you.
spk03: The next question comes from Crispin Love of Piper Sandler. Please go ahead.
spk01: Thanks. Good morning. Just when you're thinking about acquisitions in the alternative asset management space, what do you believe makes the most sense for you kind of over the intermediate term? What types of firms and investments would you be looking at and most interested in? And do you expect there to be opportunities in this area in 2024?
spk04: You know, there's plenty of firms that, you know, that are always out there for sale. What I would say is we have a business today in Sculptor. We really don't need anything other than performance. And again, performance will bring more AUM back to the platform. So we don't need to buy anything. We are going to, you know, try to grow our credit business and our real estate. You know, the three pillars of Sculptor are real estate, credit, and the multi-stretch fund. We are going to grow those three different verticals. We're going to grow them by performance. Performance has been great. That'll bring in more AUM. The firm is extremely stable, a great partner in rhythm. And, you know, we're off to the races. And I don't think we need anything more than that. If there is a platform that comes up that we think is highly accretive to the overall alt space and the way that we think about the world, of course, we'll look at it. It's no different than, you know, Baron running the mortgage company and there's another mortgage company asset that's for sale that we think is extremely attractive. Of course, we'll make a play on that. But right now, we have all the pieces in place to continue growing and putting up great returns for LPs. So unless something's extremely attractive, we'll stay the course.
spk01: Great. Thank you. I appreciate you taking my question.
spk04: Thank you.
spk03: This concludes our question and answer session. I'd like to turn the call back over to Michael Nirenberg for any closing remarks.
spk04: Thanks for everyone's questions. Thanks for joining us this morning. As I said before, super excited where we are overall as a firm and look forward to continuing to hopefully put up great results for our LPs and shareholders going forward and look forward to updating you along the way. Have a great day. Thank you.
spk03: The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.
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