Sun Capital invests in LoanLogics, strengthening tech focus

Investing in a loan management software provider, the Boca Raton-based firm makes its second technology bet since its formal launch of a dedicated tech vertical in late 2020.

Sun Capital Partners has inked a second deal from its newly launched technology strategy by buying LoanLogics, a developer of mortgage audit software.

The firm kickstarted its technology practice last November with the hiring of Elizabeth de Saint-Aignan, a former founding partner of the growth equity group at Jump Capital, as managing director.

Sun Capital’s investment in LoanLogics follows its acquisition of software engineering company Exadel in March.

Although Exadel marked the first deal from Sun Capital’s new unit, de Saint-Aignan said the firm had been investing in technology since its inception 26 years ago.

“Rather than being opportunistic, it made sense to formalize this space,” she told PE Hub.

The Boca Raton, Florida-based firm is particularly focused on investing in the digital transformation that is taking place in education, the remote workforce, healthcare and other sectors. LoanLogics, an enabler of digitization within the mortgage process, fits well within that strategy.

“Over the life of the mortgage process, 475 pages of PDFs are probably being reviewed by human beings multiple times,” said de Saint-Aignan. She added that LoanLogics’ software, embedded with machine learning and intelligence, can make the process two to three times more efficient.

Founded in 2005, LoanLogics uses machine learning to run rules, which check that as a loan originator you have what you need, that the information is complete and that you are buying what you think you are buying, de Saint-Aignan explained.

Although the entire review process is digitized, she said there may be exceptions in which human intervention is required at a later stage.

Sun Capital held conversations with the audit service provider over the course of last winter. The deal closed in the middle of last week, with the firm investing out of its $2.3 billion seventh fund. Sun Capital is reportedly seeking $2.5 billion for its upcoming eighth flagship fund.

The aim is to substantially grow LoanLogics over the next five years by accelerating the mortgage process facilitated by current products; taking the company into adjacent markets; and by penetrating sub-verticals where there is an opportunity to reduce human intervention.

“There are sub-verticals within residential like retail, wholesale lending where we have various level of penetration,” de Saint-Aignan pointed out. “And then you go outside residential, and you can look at commercial mortgage and other forms of lending. There’s plenty of opportunity close to home.”