Sculptor Launches Captive CLO Equity Platform with Anchor Commitment from Rithm Capital
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Insights
The establishment of Sculptor's captive CLO equity investment platform, underpinned by Rithm Capital's commitment, signifies a strategic expansion of the firm's asset management domain. The $406 million closure of US CLO 32, with Rithm's controlling equity stake, suggests a robust demand among institutional investors for CLO equity positions. This is a show of confidence in Sculptor's credit management capabilities. Investors should note that the reinvestment period and non-call period indicate the timeline for liquidity and risk exposure. Moreover, the refinancing of three CLO transactions demonstrates Sculptor's proactive management to optimize capital costs, which may result in enhanced returns for stakeholders.
The CLO market can offer diversified risk and, potentially, attractive yield in a fixed income portfolio. Sculptor CLO 32's backing by a $400 million portfolio of senior secured loans is of particular interest, as these loans are typically at the top of the repayment hierarchy in the event of default, offering a layer of security to investors. Management's ability to refinance indicates their acumen in capitalizing on market conditions to benefit current investors. However, investors should understand the complexities and risks inherent in CLOs, including the potential for default and the impact of economic cycles on loan performance.
The collaboration between Sculptor and Rithm Capital reflects a strategic alignment aimed at enhancing Sculptor's institutional credit reach. Institutional investors are often drawn to CLOs for their favorable risk-return profile, especially in a low interest rate environment. The positive reception and competitive pricing achieved in CLO 32's offering may suggest investor confidence in Sculptor's credit strategies and management expertise. However, investors should remain vigilant about broader market dynamics that could influence CLO performance, such as interest rate shifts and corporate default rates.
Sculptor’s Latest US CLO XXIII Closes with
Further Expanding Sculptor’s
Sculptor also today announced the close of a
Brett Klein, Global Head of Corporate Credit at Sculptor, commented “Over the last decade plus, we have developed a highly successful global institutional credit business with a strong track record of providing a diverse set of institutional investors with comprehensive investment solutions across the capital structure. We are thrilled to close our first US CLO transaction since partnering with Rithm. The significant demand we received from third-party investors for CLO 32 reinforces the benefits of our decision to launch a captive CLO equity platform.”
“We are excited to support the expansion of Sculptor’s Institutional Credit Strategies through our commitment to the firm’s CLO equity platform,” said Michael Nierenberg, Chairman, Chief Executive Officer, and President of Rithm Capital. “The new platform allows us to be nimble in accessing the CLO market when opportunities arise while continuing to scale Sculptor’s global CLO business across the US and
Sculptor CLO 32 is backed by a fully ramped
Josh Eisenberger, Head of US CLO Management at Sculptor, said, “We are pleased to have closed Sculptor CLO 32 along with three refinancing transactions so far in 2024. The support from both new and existing investors as well as the competitive pricing achieved is a testament to our longstanding investment approach and expertise in CLO management. We believe market conditions are supportive of continued positive momentum for our CLO business and we are excited about the continued growth of Institutional Credit Strategies.”
Sculptor has a long track record of managing CLOs through multiple credit cycles, and with the closing of CLO 32, has issued 42 CLOs & CBOs across the US and
About Sculptor
Sculptor is a leading global alternative asset manager and a specialist in opportunistic investing. For over 25 years Sculptor has pursued consistent outperformance by building an operating model and culture which balance the ability to act swiftly on market opportunity with rigorous diligence that minimizes risk. Sculptor’s model is driven by a global team that is predominantly home-grown, long tenured and incentivized to put client outcomes first. With offices in
About Rithm Capital
Rithm Capital (NYSE: RITM) is a global asset manager focused on real estate, credit and financial services. Rithm makes direct investments and operates several wholly-owned operating businesses. Rithm’s businesses include Sculptor Capital Management, Inc., an alternative asset manager, as well as Newrez LLC, and Genesis Capital LLC, leading mortgage origination and servicing platforms. Rithm seeks to generate attractive risk-adjusted returns across market cycles and interest rate environments. Since inception in 2013, Rithm has delivered approximately
View source version on businesswire.com: https://www.businesswire.com/news/home/20240418699670/en/
Sculptor
Heather Lucania
646-826-5752
investorrelations@sculptor.com
Sculptor – Media Relations
Jonathan Gasthalter
Gasthalter & Co.
212-257-4170
sculptor@gasthalter.com
Rithm - Investor Relations
212-850-7770
ir@rithmcap.com
Rithm – Media
Jon Keehner / Sarah Salky / Erik Carlson
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
ritm-jf@joelefrank.com
Source: Sculptor Capital Management, Inc. and Rithm Capital Corp.
FAQ
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