Performing Technology Due Diligence for Software Leaseback

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Sagence performed technology due diligence for an investment advisory firm to assess the viability of a software leaseback, enabling the client to quickly and confidently move forward with the deal.


Our client manages capital deployed primarily in private equity format funds, for institutional investors including endowments, foundations, family offices, and public and corporate pension plans. The firm was in the process of completing a leaseback agreement with one of the nation’s top mortgage originators. Fueled by explosive growth ($12 billion in loan originations during 2012 and grew to over $20 billion in 2015), the originator needed an effective way to access capital. In order to fulfill the terms of the leaseback and provide the originator working capital, it was important to verify how integral the loan origination software was to the mortgage originators’ day-to-day-operations and long-term strategy. They turned to Sagence for technology due diligence services on the software asset.


Leveraging Sagence’s data and technology due diligence framework, we quickly identified seven key areas grouped into three categories – software and content technology (content and data, application), infrastructure technology (security, hosting and hardware, network), and development capabilities and support (development, operations and support) – and reviewed the core capabilities of each area. Given our team’s holistic expertise in business, technology, and the financial services industry, we were able to review the tools, support services, and procedures required to manage infrastructure environments across the company, assess the loan origination software capabilities, and analyze the surrounding support mechanisms and controls in place, all within three weeks. Additionally, Sagence created a competing product matrix to help identify viable substitutes based on the capabilities of the existing software.


As a result of Sagence’s data and technology due diligence, our client was able to quickly and confidently close the deal with no areas of concern within the loan origination software and its ecosystem. With our combined business, technology, and financial services expertise, Sagence provided a comprehensive understanding of the indispensable role the software had throughout the originators’ technology infrastructure.