SVB Financial to Sell VC Business SVB Capital

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SVB Financial Group, a collapsed U.S. lender, announced on Thursday that an entity affiliated with Pinegrove Capital Partners will acquire its venture capital business, SVB Capital.

Under the agreement, a newly-created entity backed by permanent capital from Brookfield and Sequoia Heritage will purchase SVB Capital for a combination of cash and other economic considerations. However, SVB Financial did not disclose the financial value of the deal.

SVB Financial is seeking approval from a bankruptcy court and has scheduled a hearing for June 5 to proceed with the transaction. SVB Capital currently manages approximately $10 billion in investments on behalf of around 750 limited partner investors, including public pensions.

“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,” said Bill Kosturos, chief restructuring officer of SVB Financial Group.

In January, SVB Financial announced its intention to transfer its remaining venture capital business to a new, creditor-backed company. The coalition supporting this deal, including MFN Partners, Pacific Investment Management Company, Bank of America Securities, JP Morgan Securities, and King Street Capital, holds 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 from Brookfield and Sequoia Heritage.

The transaction has received support from SVB Financial’s key creditor groups and is subject to regulatory approval and other customary closing conditions. SVB Financial filed for bankruptcy last year following the collapse of Silicon Valley Bank.