Hamilton Lane Buys $12 Million Stake in Pagaya as AI Fintech Stock Surges

On Tuesday, Pennsylvania-based Hamilton Lane Advisors disclosed a new position in Pagaya Technologies Ltd. (NASDAQ:PGY), with an estimated value of $12.1 million as of September 30.

What happened

According to a filing with the Securities and Exchange Commission on Tuesday, Hamilton Lane Advisors initiated a new position in Pagaya Technologies Ltd.(NASDAQ:PGY). The fund acquired approximately 407,435 shares in the third quarter, for an estimated transaction value of $12.1 million.

What else to know

This is a new position for Hamilton Lane Advisors, now accounting for 7% of 13F reportable assets under management as of September 30.

Top holdings after the filing:

• NYSE:OBDC: $43.5 million (29.3% of AUM)
• NYSE:GRNT: $42.6 million (28.6% of AUM)
• NYSE:NU: $18 million (12.1% of AUM)
• NYSE:IONQ: $16 million (10.8% of AUM)
• NASDAQ:PGY: $12.1 million (7% of AUM)

As of market close on Tuesday, shares of Pagaya Technologies Ltd. were priced at $30.26, skyrocketing 198% over the past year and far outperforming the S&P 500's 18% gain in the same period.

Company Overview

Company snapshot

• Pagaya Technologies provides proprietary artificial intelligence technology and software solutions to support partners’ loan origination.
• Serves high-growth fintech companies, incumbent financial institutions, auto finance providers, and brokers across Israel, the United States, and the Cayman Islands.
• Headquartered in Tel Aviv and New York, with a workforce of approximately 500 employees as of the latest report.

Pagaya Technologies Ltd. leverages advanced AI-driven infrastructure to facilitate loan origination and asset management at scale for the financial sector. The company’s strategy centers on partnering with both established and emerging financial firms, providing technology that enhances underwriting and credit decision processes.

Foolish take

Hamilton Lane Advisors’ new $12.1 million stake in Pagaya Technologies reflects growing institutional confidence in one of the year’s most staggering AI-driven success stories. Founded in 2016 and public since June 2022 via its merger with a special purpose acquisition company, Pagaya has become a standout among fintech stocks—its shares have soared nearly 200% over the past year alone, far outpacing the S&P 500’s 18% gain.

In its latest quarter, Pagaya reported record network volume of $2.6 billion, up 14% year over year, and $326 million in revenue, a 30% jump fueled by fee growth in the firm's personal loans and auto business. The company also posted $17 million in GAAP net income—its second straight profitable quarter—and raised its full-year outlook for both revenue and EBITDA. CEO Gal Krubiner credited the results to Pagaya’s “unique AI underwriting capabilities” and expanding partnerships with major lenders.

The stock’s staggering surge may prompt caution. In fact, shares collapsed over 90% within months of the firm's public market debut in 2022—but prices remain about 85% off their record highs, and Hamilton Lane’s move suggests Pagaya is well-positioned for durable, long-term growth in AI-powered lending.

Glossary

13F reportable assets: Assets that institutional investment managers must disclose quarterly to the SEC under Form 13F rules.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The ownership interest or holding a fund or investor has in a company.
Transaction value: The total dollar amount paid or received in a specific investment trade.
Proprietary technology: Technology owned and controlled by a company, often protected by patents or trade secrets.
Loan origination: The process by which a lender evaluates, approves, and funds a new loan for a borrower.
Underwriting: The process of assessing risk and determining the terms for approving loans or insurance.
Credit decision: The determination by a lender about whether to approve or deny a loan application.
Fintech: Companies that use technology to improve or automate financial services and processes.
Incumbent financial institutions: Established banks or financial firms with a long-standing presence in the industry.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Nu Holdings and Pagaya Technologies. The Motley Fool has a disclosure policy.