SVB Financial Group has announced that its venture capital business, SVB Capital, will be sold to an entity affiliated with Pinegrove Capital Partners.
Having filed for bankruptcy in the wake of Silicon Valley Bank’s dissolution last year, SVB Financial is officially selling SVB Capital to a newly-created entity – backed by permanent capital from Brookfield (BAM.TO) and Sequoia Heritage – for a combination of cash and other economic considerations, each of undisclosed value.
Subject to regulatory approval, the transaction is also supported by SVB Financial’s key creditor groups.
Pinegrove and SVB Capital will operate independently, each run by their existing management teams, as part of the deal.
Bill Kosturos, Chief Restructuring Officer of SVB Financial Group, commented: “We believe the agreement maximises 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.”
SVB Financial announced its intention to turn over SVB Capital back in January. The group supporting the deal holds 48% of SVB Financial’s most-senior debt, and includes MFN Partners, Pacifi Investment Management Company, Bank of America Securities, JP Morgan Securities, and King Street Capital.
SVB Capital manages $10 billion in investments on behalf of 750 limited partner investors. It continues to contest the seizure of almost $2 billion in cash.
