Sale of Silicon Valley Bank’s Old Venture Capital Arm Hits a Snag
Creditors including Pimco and Davidson Kempner may wind up taking over SVB’s roughly $10 billion venture capital business, sources say
A process to sell the venture-capital arm of bankrupt SVB Financial, the former parent of Silicon Valley Bank, has fallen flat and creditors are now gearing up for a potential takeover of the business.
Two front-runners had been vying for SVB Capital: a duo of Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital, and San Francisco private-equity firm Vector Capital, The Wall Street Journal reported in September.
Those bidders aren’t moving forward in the process, after SVB considered the bids to be too low, according to people familiar with the matter. Instead a group of SVB Financial’s creditors is planning to take over the venture capital business for themselves, the people said.
SVB Capital has around $10 billion in assets under management, including investments in venture capital funds, direct investments in tech companies, and a book of private loans. It was expected to fetch anywhere between $250 million and $500 million. Bankers at Centerview Partners were advising the parent company on the process.
If new bidders don’t show up to buy the business, it would stay in the reorganized SVB Financial which could be controlled by creditors including Pacific Investment Management Co. and Davidson Kempner Capital Management once the bankruptcy is done, the people said.
The creditor group organized earlier this year and hired PJT Partners to help them as the collapsed firm sold off its private-wealth and other units.
Silicon Valley Bank’s parent company filed for bankruptcy in March after federal regulators took over the bank, which collapsed when depositors lost confidence and ran for the exits.
The bankrupt company has been selling off assets through the chapter 11 process. It sold the investment banking arm, SVB Securities, for $100 million in July.