Private Debt Investor Podcast The diversification dilemma: Why ABF offers a solution to LPs
Oct 29, 2025
Michael Nierenberg, CEO of Rithm Capital, shares insights on the booming world of asset-based finance (ABF). He highlights how ABF provides LPs with diversified cash flow and reduces corporate risk exposure. Nierenberg discusses the importance of origination and underwriting as competitive advantages in the market. He elaborates on leveraging securitization for strong returns while managing risk. With changing economic conditions, he points out promising sectors like data centers and energy transition, showcasing ABF's potential for future growth.
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Diversified Cash Flow From Hard Assets
- Asset-based finance lets investors deploy capital into diversified, hard-asset-backed cash flows rather than concentrated corporate risk.
- Michael Nierenberg says this diversification provides current cash flow and less exposure to single-asset concentration.
Origination And Servicing Drive Differentiation
- LPs now favor managers with genuine origination, underwriting and servicing capabilities to create alpha in ABF.
- Nierenberg highlights owning origination and servicing platforms as a real differentiator in performance.
Rithm's Originations Feed ABF Portfolios
- Rithm owns a large US mortgage company and is the fourth-largest servicer, enabling daily origination feeding ABF strategies.
- The firm also runs a major non-bank construction lending business with short-duration, high cash flow loans.