Pagaya inks $2.4 billion loan purchase deal with Blue Owl

NEW YORK - Pagaya (NASDAQ:PGY) Technologies LTD. (NASDAQ: PGY), an AI-focused financial technology firm, has entered into a forward flow agreement with funds managed by Blue Owl Capital (NYSE: OWL) to acquire up to $2.4 billion in consumer loans over the next 24 months. Blue Owl, currently valued at $37.26 billion in market cap, has demonstrated strong market performance with a 63.84% return over the past year. This partnership aims to enhance Pagaya’s capital efficiency and diversify its funding sources.

The agreement allows Pagaya to continue expanding its forward flow program, a capital-efficient strategy for funding loan originations, complementing its successful asset-backed securities (ABS) program, which has amassed over $26 billion since its inception. According to InvestingPro, Blue Owl maintains robust financial health with a current ratio of 1.96, indicating strong liquidity to support such strategic initiatives.

Gal Krubiner, Co-founder and CEO of Pagaya, emphasized the significance of the deal, stating that it "underscores the quality and growing demand for assets generated on our network." He highlighted the company’s robust and varied funding program that supports its expanding role in the U.S. lending ecosystem.

Ivan Zinn, Head of Alternative Credit at Blue Owl, also commented on the transaction’s potential to bolster the U.S. consumer lending industry. He noted that the partnership with Pagaya would enable lenders across the country to extend their services to more borrowers, thereby increasing access to essential capital.

This strategic alliance with Blue Owl Capital, a prominent asset manager with over $250 billion in assets under management as of December 31, 2024, represents a mutual commitment to supporting long-term growth in the financial sector. Blue Owl has shown impressive revenue growth of 32.15% in the last twelve months and offers a dividend yield of 2.89%. InvestingPro analysis suggests the stock is slightly overvalued at current levels, with additional insights available in the comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks.

The information in this article is based on a press release statement.

In other recent news, Blue Owl Capital has been the subject of several key developments. Citi analysts, led by Chris Allen, reinstated coverage of Blue Owl Capital with a Buy rating and a price target of $30.00, citing the company’s earnings potential and business mix. However, Goldman Sachs downgraded Blue Owl Capital stock from Buy to Neutral and set a new price target of $24.75, attributing the adjustment to expected slowing growth in the company’s credit business and rising costs associated with fundraising efforts.

In other developments, Blue Owl Capital’s shareholders approved all proposals concerning their upcoming merger with Blue Owl Capital Corporation III. The merger is anticipated to create a more diversified and robust business development company with enhanced credit quality. The company also secured a $2.3 billion loan for the development of a data center project in Texas in collaboration with Newmark Group (NASDAQ:NMRK), Crusoe Energy Systems, and Primary Digital Infrastructure.

Blue Owl Capital was also involved in Databricks Inc.’s largest debt financing round to date, which raised over $5 billion. The funds are intended to alleviate tax burdens related to stock sales by Databricks’ employees. These recent developments highlight Blue Owl Capital’s active role in the asset management industry and its strategic moves to drive growth and diversification.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.