(Reuters) -Collapsed U.S. lender SVB Financial Group said on Thursday that an entity affiliated with Pinegrove Capital Partners will acquire its venture capital firm, SVB Capital.
A newly created entity, backed by permanent capital from Brookfield and Sequoia Heritage, will buy SVB Capital for a combination of cash and other economic considerations, SVB Financial said. A financial value was not disclosed.
SVB Financial is seeking approval from a bankruptcy court and has requested a hearing on June 5.
SVB Capital manages approximately $10 billion in investments on behalf of approximately 750 limited partner investors, such as public pension funds, that contributed capital to the investment fund, court documents show. SVB Financial continues to fight US regulators’ seizure of nearly $2 billion in cash.
“We believe the agreement maximizes value for the benefit of SVB Financial Group’s constituents, with a significant cash component and the opportunity to participate in the company’s future upside potential,” said Bill Kosturos, SVB Financial Group’s head of restructuring. .
In January, SVB Financial had announced that it planned to transfer its remaining venture capital operations to a new creditor-backed company. The coalition backing the deal, which includes MFN Partners, Pacific Investment Management Company, Bank of America Securities, JP Morgan Securities and King Street Capital, owns about 48% of SVB Financial’s top debt.
As part of the agreement, Pinegrove and SVB Capital will operate independently, each led by their existing management teams, with joint long-term financial support from Brookfield and Sequoia Heritage.
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The transaction is also supported by SVB Financial’s key creditor groups and is subject to regulatory approvals and other customary closing conditions, the company said.
SVB Financial filed for bankruptcy last year after Silicon Valley Bank went bankrupt.
The funds and general partner entities of SVB Securities and SVB Capital were not included in the Chapter 11 filing, the company said last year.
