Pagaya Announces Forward Flow Agreement with Blue Owl Managed Funds to Purchase up to $2.4 Billion of Consumer Loans Originated on the Pagaya Network

Rhea-AI Summary

Pagaya Technologies (NASDAQ: PGY) has announced a new forward flow agreement with Blue Owl Capital managed funds to purchase up to $2.4 billion in consumer loans through the Pagaya network over a 24-month period.

This agreement represents a strategic expansion of Pagaya's funding program, complementing its existing ABS program which has raised more than $26 billion since inception. The forward flow program enables Pagaya to fund loan originations in a capital-efficient manner, supporting its growing presence in the U.S. lending ecosystem.

Positive

• Secured new $2.4 billion forward flow agreement for consumer loans
• Diversification of funding sources through strategic partnership
• Demonstrates market confidence in Pagaya's loan origination quality
• Established ABS program with $26 billion raised since inception

Negative

• None.

Insights

Financial Analyst

The $2.4 billion forward flow agreement with Blue Owl represents a transformative development for Pagaya's funding strategy and market position. This deal is particularly significant for several reasons:

First, the partnership with Blue Owl, a major player in private credit markets with over $165 billion in assets, provides Pagaya with a prestigious institutional backing that validates their AI-driven lending platform. The structured nature of the agreement - purchasing loans over 24 months - offers predictable, committed capital that can support sustained growth.

Second, this agreement strategically diversifies Pagaya's funding sources beyond their traditional ABS program, which has raised $26 billion since inception. This dual-track funding approach (ABS + forward flow) creates a more resilient capital structure and potentially reduces dependency on market conditions for securitization issuance.

The deal's structure is particularly advantageous in the current market environment where funding costs are elevated. Forward flow agreements typically offer more favorable terms compared to warehouse facilities, as they provide guaranteed loan purchases at pre-agreed terms. This could potentially improve Pagaya's margins and reduce funding uncertainty.

Looking at broader implications, this partnership signals Pagaya's evolution from a pure technology provider to a more integrated financial platform. The company's ability to attract institutional capital of this magnitude demonstrates the scalability of their AI-driven credit assessment model and could accelerate their market penetration in consumer lending.

Market Research Analyst

This landmark agreement signals a significant evolution in the institutional approach to consumer credit investments. The $2.4 billion commitment from Blue Owl represents one of the larger forward flow agreements in the alternative lending space, indicating growing institutional acceptance of AI-driven credit platforms.

The deal's timing is particularly strategic given the current market dynamics. Traditional banks are tightening lending standards, creating opportunities for alternative lenders with sophisticated credit assessment capabilities. Pagaya's AI platform, validated by this institutional commitment, is well-positioned to capture market share in this environment.

The partnership structure reveals an important trend in fintech funding - the movement toward more structured, long-term capital commitments rather than transaction-based relationships. This shift suggests a maturing market where institutional investors are seeking deeper operational integration with technology platforms rather than purely transactional exposure.

The agreement also demonstrates the growing sophistication of private credit markets in consumer lending. Blue Owl's involvement indicates that institutional investors are increasingly viewing AI-driven lending platforms as a scalable way to access consumer credit exposure, potentially leading to more similar partnerships industry-wide.

Agreement brings a new, highly strategic asset investor to Pagaya, as the Company continues to diversify its funding program to drive capital efficiency

NEW YORK--(BUSINESS WIRE)-- Pagaya Technologies LTD. (NASDAQ: PGY) (“Pagaya” or “the Company”), a global technology company delivering AI-driven product solutions for the financial ecosystem, today announced a new forward flow agreement with funds managed by Blue Owl Capital (“Blue Owl”) to purchase up to $2.4 billion in consumer loans through the Pagaya network over a 24-month period.

Pagaya’s forward flow program, which allows the Company to fund loan originations in a capital efficient manner, continues to be a growing source of funding alongside Pagaya’s market-leading ABS program, which has raised more than $26 billion since inception.

“Blue Owl’s investment underscores the quality and growing demand for assets generated on our network,” said Gal Krubiner, Co-founder and CEO of Pagaya. “We have built a resilient, diversified funding program that continues to support our growing footprint in the U.S. lending ecosystem.”

“This transaction demonstrates the role private credit can play to support the U.S. consumer lending industry. Our new agreement with Pagaya will help lenders nationwide expand their reach and provide more prospective borrowers access to the capital they need,” said Ivan Zinn, Head of Alternative Credit at Blue Owl. “We look forward to strengthening and expanding this relationship with Pagaya over the coming years.”

About Pagaya Technologies

Pagaya (NASDAQ: PGY) is a global technology company making life-changing financial products and services available to more people nationwide, as it reshapes the financial ecosystem. By using machine learning, a vast data network and an AI-driven approach, Pagaya provides consumer credit and other products for its partners, their customers, and investors. Its proprietary API and capital solutions integrate into its network of partners to deliver seamless user experiences and greater access to the mainstream economy. For more information, visit pagaya.com.

About Blue Owl Capital

Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives.
With over $250 billion in assets under management as of December 31, 2024, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Assets. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional investors, individual investors, and insurance companies differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.
Together with over 1,100 experienced professionals, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206877599/en/

Pagaya Contacts

Investors & Analysts

Joshua Fagen

ir@pagaya.com

Media & Press

Emily Passer

press@pagaya.com

Blue Owl Contacts

Nick Theccanat

Principal, Corporate Communications & Government Affairs

+1 212-970-6868

nick.theccanat@blueowl.com

Source: Pagaya Technologies LTD.

FAQ

What is the value of Pagaya's (PGY) new forward flow agreement with Blue Owl?

Pagaya's new forward flow agreement with Blue Owl is valued at up to $2.4 billion for consumer loans over a 24-month period.

How much has Pagaya's (PGY) ABS program raised since inception?

Pagaya's ABS program has raised more than $26 billion since inception.

What is the duration of PGY's forward flow agreement with Blue Owl?

The forward flow agreement with Blue Owl has a duration of 24 months.

How does the Blue Owl agreement benefit Pagaya's (PGY) funding strategy?

The agreement diversifies Pagaya's funding program, enabling more capital-efficient loan originations while complementing their existing ABS program.