SVB to sell venture-capital arm to investment firm Pinegrove

Dive Brief:

SVB Financial has agreed to sell its venture-capital unit to a newly created affiliate of investment firm Pinegrove Capital Partners, the former parent of Silicon Valley Bank said Thursday.
SVB Capital will be acquired for a combination of cash and “other economic consideration,” according to a Thursday news release. Spokespeople for both firms didn’t immediately respond to requests for comment on the deal’s value. Pinegrove and SVB Capital will operate independently, with both financially backed by permanent capital from Brookfield Asset Management and Sequoia Heritage.
The sale agreement, which SVB Financial said is supported by key creditor groups, is subject to regulatory and bankruptcy court approval. SVB has requested a bankruptcy court hearing on the sale for June 5, the release said.

Dive Insight:

SVB Financial filed for Chapter 11 bankruptcy protection in March 2023 following the collapse of the bank, allowing the company to preserve value as it assessed strategic alternatives for assets such as SVB Capital, Bill Kosturos, SVB Financial’s chief restructuring officer, said at the time.

Founded in 1999, SVB Capital has roughly $10 billion in assets under management, which includes investments in tech startups and in venture-capital funds, as well as a private-loan book.

SVB Financial filed court documents in January indicating it planned to turn the venture-capital unit over to a new, creditor-backed entity, while the company continued its legal fight against the Federal Deposit Insurance Corp. over the regulator’s seizure of nearly $2 billion in cash reserves.

SVB Financial had looked into selling the VC arm before deciding its value — as much as $572 million — was greater than what leading bidders had offered, Bloomberg reported in January.

San Francisco-based Pinegrove, founded last year, offers secondary liquidity solutions for general partners and limited partners and invests in mid-to-late-stage private tech companies, the release said.

SVB Financial is “pleased to have reached an agreement that will position the business to thrive over the long-term and has the support of SVB Financial Group's major creditor groups,” Kosturos said in Thursday’s release.

“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,” Kosturos said in the release.

SVB Financial received court approval last July to sell its investment-banking unit to a management group that included the business’s founder, Jeff Leerink.