SVB Capital Could Sell for $500 Million

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Silicon Valley Bank’s former owner is reportedly close to selling its venture capital business.

SVB Capital has attracted two top bidders, The Wall Street Journal (WSJ) reported Friday (Sept. 15), citing sources familiar with the matter. Those potential buyers include SkyBridge Capital and Atlas Merchant Capital — both working together — and Vector Capital.

Sources told the WSJ the business could sell for between $250 million and $500 million, with a court decision on the buyer expected in the coming weeks.

Silicon Valley Bank (SVB) was taken over by regulators in March after a run on its deposit. Its failure kicked off a larger crisis in regional banking, with two other lenders — Signature Bank and First Republic Bank — also folding.

Owner SVB Financial Group filed for bankruptcy soon after, selling most of Silicon Valley Bank’s loans and deposits of SVB to First Citizens.

In July, a bankruptcy judge approved the sale of SVB Financial Group’s investment bank to its managers. SVB Financial had purchased Leerink Financial Partners in 2019 for $280 million and rechristened it SVB Securities.

The buyers include members of the unit’s management team and Jeff Leerink, who founded the company and ran it after it had been acquired. 

Meanwhile, shockwaves from SVB’s downfall continue to be felt. As PYMNTS wrote last month, both SVB and FDIC went from being “formerly obscure acronyms” this spring to becoming household names.

“That’s because after SVB collapsed due to a structurally weakened balance sheet, compounded by a panic-induced bank run, it entered into an FDIC [Federal Deposit Insurance Corp.] receivership along with two of its regional peers, Signature Bank and Silvergate Bank,” the report said. 

The downfall led to calls for action, suggested by the FDIC’s recent notice of proposed rulemaking (NPR) to require insured depository institutions with more than $100 billion in assets to maintain a minimum amount of long-term debt.

“The failure earlier this year of three large regional banks only underscored the agencies’ urgency in considering whether to put forward such a proposal,” FDIC Chairman Martin J. Gruenberg said in a statement.

“[A] long-term debt requirement such as the one being proposed today can mitigate the resolution challenges encountered in the failure of large regional banks and bolster financial stability,” Gruenberg added.

Image by: SVB Capital

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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