INVESTMENTS |
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| Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INVESTMENTS | INVESTMENTS As of December 31, 2025 and 2024, our investments in loans and securities portfolio consisted of (i) investments held at fair value with changes in fair value recorded in unrealized non-credit related adjustments on available for sale securities, excluding the portion relating to any credit loss; (ii) investments in loans and securities held at fair value, with changes in fair value recorded in earnings, for which we elected the fair value option; and (iii) loans held for investment at amortized cost, less an allowance for potential uncollectible amounts. Below is a disaggregated presentation of our investments in loans and securities, including fair value adjustments, accrued interest income and net of the allowance for credit losses, as applicable (in thousands):
(1) $504.3 million and $414.8 million were held by the Company for regulatory risk retention purposes as of December 31, 2025 and 2024, respectively. Investments in The amortized cost, gross unrealized gains and losses and fair value of Investments in Securities Available for Sales (“AFS securities”) as of December 31, 2025 and 2024 were as follows (in thousands). The Company has determined that it is the primary beneficiary of certain VIEs that were established to purchase investments in Pagaya sponsored ABS notes and certificates. The portion of these consolidated VIEs that the Company does not own, is accounted for as noncontrolling interest in the consolidated financial statements. Refer to Note 6 for additional information.
(1) Includes accrued interest receivable of $25.8 million.
(2) Includes accrued interest receivable of $13.7 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation. The following tables set forth the fair value and gross unrealized losses on investments in AFS securities without an allowance for credit losses aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position, as of the dates indicated (in thousands):
The following table sets forth the amortized cost and fair value of AFS securities by contractual maturities, as of the date indicated (in thousands):
(1) Based on contractual maturities of corresponding repurchase agreements. See Note 8 for additional information. (2) Includes accrued interest receivable of $13.7 million, previously reported within “Fee receivables” as of December 31, 2024, has been reclassified to conform to the current period’s presentation. The following table sets forth gross proceeds and related investment gains and losses, as well as losses on write-downs and the allowance for credit losses of AFS securities, for the periods indicated (in thousands):
The following tables set forth the activity in the allowance for credit losses for AFS securitization certificates, as of the dates indicated (in thousands):
Refer to Note 10 for additional information regarding the allowance for credit losses for investments. Investments in loans and securities, under the fair value option The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We elected the fair value option to measure certain loans and securities, as we believe that fair value best reflects the economic transaction of investing in certain new loans and securities. We determined the fair value of certain loans and securities using a discounted cash flow methodology, while also considering market data as it became available. We record the initial fair value measurement and subsequent measurement changes in fair value in the period in which the changes occur within the gains and (losses) on investments in loans and securities in the consolidated statements of operations. We report the changes in fair value within (gains) and losses on investments in loans and securities in the consolidated statements of cash flow. The following table presents activities of investments in securities for which we elected the fair value option. See Note 10 for the assumptions used in our fair value model (in thousands):
(1) The balance excludes $4.6 million of other loans accounted for under the fair value option. Refer to Note 10 for additional information regarding the discounted cash methodology used for investments in loans and securities for which we elected the fair value option Equity Method and Other Investments The following investments, including those accounted for under the equity method, are included within Equity method and other investments in the consolidated balance sheets as of December 31, 2025 and December 31, 2024 (in thousands):
(1) The Company owns approximately 5.4% and is the general partner of Pagaya Smartresi F1 Fund LP. (2) Represents the Company’s proprietary investments. Income (loss) from these investments is included in Investment (loss) income in the consolidated statements of operations.
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