SVB Financial to divest SVB Capital venture capital business

Collapsed U.S. lender SVB Financial Group announced on Thursday that Pinegrove Capital Partners will acquire its venture capital business, SVB Capital, in a deal backed by Brookfield and Sequoia Heritage.

The newly-created entity, supported by permanent capital from Brookfield and Sequoia Heritage, will purchase SVB Capital for a combination of cash and other economic considerations, although the financial value was not disclosed by SVB Financial.

SVB Financial is currently seeking approval from a bankruptcy court and has scheduled a hearing for June 5. SVB Capital manages approximately $10 billion in investments on behalf of 750 limited partner investors, including public pensions. The company is also fighting against U.S. regulators’ seizure of nearly $2 billion in cash.

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

The transaction will allow Pinegrove and SVB Capital to operate independently, each led by their existing management teams, with the long-term financial backing of Brookfield and Sequoia Heritage. The deal is supported by SVB Financial’s key creditor groups and is subject to regulatory approval and other customary closing conditions.

SVB Financial filed for bankruptcy last year after the collapse of Silicon Valley Bank, but SVB Securities and SVB Capital’s funds and general partner entities were not included in the Chapter 11 filing.