Pagaya Founders (photo source company website)
Israeli fintech firm Pagaya will suspend daily withdrawals from its Pagaya Opportunity Fund, Israel’s largest investment fund with about $1.38 billion in assets under management. Pagaya informed investors that it will now transfer funds on a quarterly basis.
Pagaya management revealed that the move was taken in response to a recent increase in requests by investors to withdraw their funds. But why did this happen? Is this related to the ongoing political turmoil in Israel sparked by the government of Benjamin Netanyahu’s decision to reform the country’s judicial system by ending the Supreme Court’s ability to serve as a “check” on government actions? Many prefect – including major international investment firms and ratings agencies like Moody’s – have predicted this will cause a drop in foreign investment in Israel.
Or could this be because Pagaya was one of the firms put at risk when Silicon Valley Bank (SVB) collapsed recently?
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Or maybe it is happening because at one point last year Pagaya’s stock lost 97% of its value as world indices plummeted due to the global financial crisis.
Pagaya told investors, “In accordance with the re-evaluation policy of the fund, a periodic review of the fair value of the assets is carried out by an independent third party. At the end of 2022 it was decided to carry out a write-down as requested. The fact that other funds in the field of consumer credit in Israel did not carry out value reductions raises questions about the adequacy of their re-evaluation methods.”
Founded in 2016 by CEO Gal Krubiner, Yahav Yulzari – a former Israeli soccer star — Avital Pardo and CEO Gal Krubiner, Pagaya Investments is a global financial technology company with new ways to handle institutional asset management. Focusing on fixed income and alternative credit, the company offers a variety of discretionary funds to institutional investors (including pension funds and sovereign wealth funds), insurance companies and banks. It boasts a suite of “unmatched artificial intelligence technologies and state-of-the-art algorithms delivers an exceptional, scalable performance edge in the digital lending space.”
Pagaya Technologies is a fintech company that has developed an algorithmic underwriting model for consumer credit. The investment policy is to invest in loans, gain interest and hold them until their repayment and/or sale, and reinvest the proceeds. The fund invests in consumer credit in the US and performs Cherry Picking for consumer credit, in accordance with the fund’s internal underwriting model developed by Pagaya Technologies.
