Collapsed U.S. lender SVB Financial Group said on Thursday that an entity affiliated with Pinegrove Capital Partners will acquire its venture capital business, SVB Capital.
A newly-created entity, backed by permanent capital from Brookfield and Sequoia Heritage, will buy SVB Capital for a combination of cash and other economic considerations, SVB Financial said. It did not disclose a financial value.
SVB Financial is seeking approval from a bankruptcy court and has requested a hearing on June 5.
SVB Capital manages about $10 billion in investments on behalf of about 750 limited partner investors, such as public pensions, that have contributed capital to the investment fund, according to court documents. SVB Financial continues to fight U.S. regulators’ seizure of nearly $2 billion in cash.
“We believe the agreement maximizes the value for the benefit of SVB Financial Group’s constituents, with a significant cash component as well as the ability to participate in the future upside potential of the business,” Bill Kosturos, chief restructuring officer of SVB Financial Group said.
In January, SVB Financial had said it planned to turn over its remaining venture capital business to a new, creditor-backed company. The coalition backing the deal, which includes MFN Partners, Pacific Investment Management Company, Bank of America Securities, JP Morgan Securities, and King Street Capital, hold about 48% of SVB Financial’s most-senior debt.
As part of the agreement, Pinegrove and SVB Capital will operate independently, each led by their existing management teams, with common long-term financial backing of Brookfield and Sequoia Heritage.
The transaction is also supported by SVB Financial’s key creditor groups and is subject to regulatory approval and other customary closing conditions, the firm said.
SVB Financial filed for bankruptcy last year after Silicon Valley Bank collapsed.
SVB Securities and SVB Capital’s funds and general partner entities were not included in the Chapter 11 filing, the company had said last year.
Reuters