Investing > Best Alternative Investments
Technology: Pagaya is doing what financial incumbents only dream of — making AI a utility. Focused on consumer credit thus far, Pagaya’s AI analyzes millions of data points to conduct underwriting and identify borrowers more intelligently. This approach unlocks more low-risk, high yield investment opportunities for institutions, as well as enables online lenders to look at a borrower more holistically — going beyond traditional credit scores.
Impact: Pagaya’s tech-driven approach to managing institutional money provides a significant lifeline to underfunded pension plans and opens opportunities for consumers. With Pagaya’s AI, institutions gain above-market-average returns, which get passed on to the people who need it most via their pension funds (teachers, firefighters, police and public servants). At the same time, through Pagaya’s work with online lenders, previously overlooked consumers who are reliable borrowers get access to loans.
Deal Innovation / Flow: In the past seven months, Pagaya has issued four securitizations led by Cantor Fitzgerald bringing the firm’s total issuance to over $500MM and solidifying its place as a top ten issuer in 2019 (data from Finsight - https://bit.ly/2IkwHoG). Pagaya’s AI manages all of the securitizations — this had never been done before the firm announced the first deal in February 2019. Pagaya uses its AI to select individual loans instead of the industry standard of securitizing a pool of previously assembled assets. The oversubscription and speed between deals show increasing market demand for Pagaya’s offering.
In today’s economic climate, Pagaya ability to forever-change how institutional money get managed is more important now than ever before. Pagaya provides stability only made possible by its unique, effective combination of technology and financial expertise.