Here are the key points regarding Pagaya Technologies’ acquisition of Theorem Technology:
- Acquisition Overview:
- US-Israeli fintech Pagaya Technologies has agreed to acquire Theorem Technology, a Silicon Valley-based institutional asset manager specializing in machine learning for an undisclosed amount.
- The deal is expected to close in Q4 2024.
- Business Integration:
- Theorem’s institutional fund management, consumer credit funds, and engineering capabilities will merge with Pagaya’s AI-powered consumer credit and residential real estate solutions.
- Growth and Expansion:
- Pagaya anticipates that its fund management business will grow to over $3 billion in investment vehicles, separate from its existing securitization program.
- This acquisition aligns with Pagaya’s strategy to diversify its funding sources and enhance capital efficiency.
- Theorem Technology’s Expertise:
- Founded in 2014, Theorem specializes in post-trade data management for consumer credit and utilizes machine learning to analyze and price loans.
- The firm manages over $1.7 billion for global institutional investors, including endowments, sovereign wealth funds, pensions, and insurance companies.
- Strategic Benefits:
- The acquisition will provide Theorem with access to Pagaya’s extensive investment sourcing network, while Pagaya will benefit from Theorem’s machine learning investment technology.
- Investors in Theorem’s credit funds will gain access to credit assets from Pagaya’s network of top US lenders, with over $180 billion in application volume per quarter.
- Recent Pagaya Developments:
- The acquisition follows Pagaya securing a $280 million credit facility led by BlackRock earlier this year.
