SVB Financial Group entered into a definitive agreement under which a newly created entity affiliated with Pinegrove Capital Partners and backed by permanent capital from Brookfield Asset Management and Sequoia Heritage will acquire SVB Capital, SVB Financial Group’s investment platform business. Under the terms of the agreement, SVB Capital would be acquired for a combination of cash and other economic consideration.
Pinegrove is a capital solutions partner for the venture capital ecosystem. Pinegrove provides secondary liquidity solutions for general partners and limited partners with a focus on investing in mid-to-late-stage private technology companies.
Pinegrove and SVB Capital will operate independently, each led by their existing management teams, with the common long-term financial backing of Brookfield and Sequoia Heritage.
“The SVB Capital business has built an exceptional reputation as the premier investment partner to top venture capital firms and technology companies, and we are 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,” Bill Kosturos, chief restructuring officer of SVB Financial Group, said. “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. In addition, the transaction is a strong outcome for the team at SVB Capital, its limited partners and other key stakeholders.”
“Over the last quarter-century, our firm has thrived on the deep trust we’ve cultivated with the most sought-after general partnerships in venture capital. In addition, we have consistently aligned our interests with those of our limited partners,” Aaron Gershenberg, founding partner and member of the operating committee at SVB Capital, said. “Those foundational principles will guide us into the future. Leveraging SVB Capital’s extensive history and track record, our partnership with Pinegrove will expand our multi-strategy platform to directly meet the unique needs of the venture capital and limited partner communities.”
“Pinegrove is honored to partner with Aaron and the SVB Capital team. We are thrilled to work collaboratively on our collective mission of enhancing liquidity options in the venture capital ecosystem,” Brian Laibow, CEO and founding partner of Pinegrove, said.
The agreement is subject to bankruptcy court and regulatory approval, as well as other customary closing conditions. On May 2, SVB Financial Group filed a motion with the U.S. Bankruptcy Court for the Southern District of New York seeking the court’s authorization to approve buyer protections for the Pinegrove affiliate and consummate a sale of the SVB Capital business. SVB Financial Group intends to seek approval of the buyer protections at a hearing on May 16 and has requested that the bankruptcy court schedule a hearing to approve the sale of SVB Capital on June 5.
The transaction is supported by SVB Financial Group and key creditor groups, including the official committee of unsecured creditors, the ad hoc group of senior noteholders and the ad hoc cross-holder group.
Centerview Partners is serving as financial advisor, Sullivan & Cromwell is serving as legal counsel and Alvarez & Marsal is serving as restructuring advisor to SVB Financial Group as debtor-in-possession. Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal counsel to Pinegrove.
