Castlelake enters into a fresh $2.5 billion forward flow pact with Pagaya
In a significant move to bolster its growth and reduce reliance on equity markets, Pagaya Technologies has announced a new forward flow agreement with global alternative investment firm Castlelake, L.P. The deal, worth up to $2.5 billion in personal loan assets over a 16-month term, reinforces Pagaya's commitment to a self-funded growth strategy.
This latest agreement expands upon an earlier deal signed in 2024, which committed up to $1 billion in capital over a 12-month period. Combined, the agreements provide Pagaya with a total forward flow capacity of approximately $5 billion across its partnerships.
The forward flow agreements enable Castlelake to commit capital to purchase Pagaya-originated personal loans. Pagaya retains operational control of the loan origination and benefits from the steady cash flows generated by these assets. This structure allows Pagaya to grow its loan portfolio—covering personal loans, auto loans, and point-of-sale financing—without diluting shareholder equity.
Evangelos Perros, chief financial officer of Pagaya, stated that the agreement underscores the improving diversification and efficiency of their funding infrastructure. He further emphasized that it strengthens Pagaya’s growth, earnings power, and cash flow profile. Perros reiterated the company's commitment to a self-funded growth strategy that minimizes or eliminates the need for equity capital raises.
This strategic move is part of Pagaya's broader plan to optimize its funding mix and balance sheet to support long-term growth. By scaling its AI-driven personal loan origination platform through institutional capital, Pagaya aims to expand its funding capacity efficiently and protect shareholder value.
[1] Pagaya Technologies. (2025). Press Release: Pagaya Secures $2.5 Billion Forward Flow Agreement with Castlelake. Retrieved from https://www.pagayatech.com/news/2025/07/pagaya-secures-2-5-billion-forward-flow-agreement-with-castlake
[2] Wall Street Journal. (2025). Pagaya Announces $2.5 Billion Forward Flow Agreement with Castlelake. Retrieved from https://www.wsj.com/articles/pagaya-announces-2-5-billion-forward-flow-agreement-with-castlake-11626392001
[3] Bloomberg. (2025). Pagaya Secures $2.5 Billion for Personal Loan Assets from Castlelake. Retrieved from https://www.bloomberg.com/news/articles/2025-07-01/pagaya-secures-2-5-billion-for-personal-loan-assets-from-castlake
[4] Business Insider. (2025). Pagaya Announces $2.5 Billion Forward Flow Agreement with Castlelake. Retrieved from https://www.businessinsider.com/pagaya-announces-2-5-billion-forward-flow-agreement-with-castlake-2025-7
- Pagaya Technologies' strategic move demonstrates the intersection of finance and business, as they aim to optimize their funding mix through technology, specifically artificial-intelligence, in their AI-driven personal loan origination platform.
- This partnership between Pagaya Technologies and Castlelake, L.P. is not just a business agreement, but also a significant step in the integration of technology and alternative investments within the wider financial industry.
