TLDR:
- SVB Financial Group is selling its venture capital business, SVB Capital, to an entity affiliated with Pinegrove Capital Partners.
- The sale is for a combination of cash and other economic considerations, supported by key creditor groups and is subject to regulatory approval.
SVB Financial Group has announced the sale of its venture capital business, SVB Capital, to an entity affiliated with Pinegrove Capital Partners. Following the bankruptcy filing after Silicon Valley Bank’s dissolution last year, SVB Financial is officially divesting SVB Capital to a newly-created entity backed by permanent capital from Brookfield and Sequoia Heritage. The deal is a combination of cash and other economic considerations, the specific values of which remain undisclosed. The transaction, subject to regulatory approval, is supported by SVB Financial’s key creditor groups.
Pinegrove and SVB Capital are expected to operate independently with their existing management teams in place as part of the agreement. Bill Kosturos, Chief Restructuring Officer of SVB Financial Group, commented on the sale, stating that the deal maximizes value for the benefit of SVB Financial Group’s constituents, with a significant cash component and the potential to participate in the future upside potential of the business. The initial announcement of the intention to sell SVB Capital was made in January by SVB Financial.
The group backing the deal, which holds 48% of SVB Financial’s most-senior debt, includes MFN Partners, Pacifi Investment Management Company, Bank of America Securities, JP Morgan Securities, and King Street Capital. SVB Capital currently manages $10 billion in investments for 750 limited partner investors and continues to contest the seizure of nearly $2 billion in cash.
