SkyBridge Capital, led by Anthony Scaramucci, and Atlas Merchant Capital are both vying for SVB Capital, the venture capital and credit-investment branch of SVB Financial Group, previously associated with Silicon Valley Bank.
Apart from these two financial giants, Vector Capital, a private-equity entity based in San Francisco, has also thrown its hat into the ring for the credit investment entity, as per a report by the Wall Street Journal, which cites sources privy to the developments.
A verdict on the top bidder is anticipated in the upcoming weeks.
SVB Capital, currently navigating bankruptcy proceedings, is speculated to command a deal value ranging from $250 million to $500 million.
Nonetheless, it’s imperative to highlight that the deal is far from a foregone conclusion and will require a comprehensive assessment by the creditors’ committee before any finalization.
Silicon Valley Bank, a leading lender to tech startups and growth companies in Silicon Valley, faced a setback on March 10 when it was taken over by the Federal Deposit Insurance Corporation (FDIC).
Following this, on March 17, its parent entity, SVB Financial Group, sought Chapter 11 bankruptcy protection in a New York court. This move came after regulators assumed control of the tech-centric lender, paving the way for an asset liquidation.
In the subsequent developments, First Citizens Bancshares, a notable regional banking institution, came forward to purchase a significant portion of loans and deposits previously held by Silicon Valley Bank.
Furthermore, SVB Securities, the investment banking arm of SVB Financial, secured approval in July to be acquired by its founder, Jeff Leerink, along with a consortium of eight senior executives, in a deal valued at $100 million.
SkyBridge Managest Over $1.8 Billion
Anthony Scaramucci’s SkyBridge Capital oversees an impressive portfolio exceeding $1.8 billion. A significant chunk of this, around $580 million, is dedicated to digital asset investments.
Scaramucci became a widely-discussed figure in 2017 due to his swift departure from his role as the communications director for then-President Donald Trump, serving for just 10 days.
Contrastingly, Vector Capital primarily targets mid-tier tech firms and those buoyed by technological capabilities. Atlas Merchant Capital, with presences in both New York and London, diversifies its investment approach across public and private sectors.
It’s also pertinent to highlight that the downfall of Silicon Valley Bank occurred shortly after the collapse of another bank, Silvergate, which was known for its crypto-friendly stance.
Silvergate was severely impacted by FTX’s downfall last November.
After FTX’s collapse, Silvergate experienced a massive withdrawal, prompting them to offload $5.2 billion in debt securities from their balance sheet. This was done, albeit at a significant loss, to accommodate around $8.1 billion in user withdrawal requests.
Amid the ongoing banking turmoil in the US, the FDIC has been wrestling with the task of managing close to $13 billion in challenging-to-liquidate mortgage bonds, a repercussion of the failures of both Silicon Valley Bank and Signature Bank.
These bonds, primarily anchored by extended-duration, low-interest loans mostly for budget-friendly apartment construction projects, comprised a segment of a more extensive $114 billion portfolio. This vast collection came under FDIC’s oversight when the agency intervened with the distressed banks.