Mar 14, 2023
Apollo, Blackstone and KKR said to circle SVB's loan assets
SVB black eye could alter tech community: Wedbush head of equity trading
Apollo Global Management Inc., Blackstone Inc. and KKR & Co. have expressed interest in snapping up a book of loans held by Silicon Valley Bank, the California lender seized by federal regulators last week, people with knowledge of the matter said.
Apollo, Blackstone and KKR, three of the world’s largest alternative asset managers, are among investors looking to buy pieces of Silicon Valley Bank, according to the people, who asked not to be identified discussing confidential information.
The bank had US$73.6 billion of loans as of Dec. 31, 2022. The size of the loan book Apollo and Blackstone are interested in couldn’t immediately be determined. Blackstone is also looking at other assets it may purchase from the bank, one of the people said.
Representatives for Apollo, Blackstone and KKR declined to comment.
The Federal Deposit Insurance Corp. took over Silicon Valley Bank on Friday, after its long-established customer base of tech startups began withdrawing deposits en masse.
At the end of last year, the bank had more than US$175 billion in mostly uninsured deposits and US$209 billion in total assets. Many of those assets were long-term bonds the bank had to sell at a loss due to rising interest rates. Other assets include loans to early-stage and growth companies, as well as credit for wealthy entrepreneurs and venture capital funds.
The loan portfolio is seen as an attractive buy and was not a contributing factor in the bank run that caused Silicon Valley Bank’s demise, the people said. A representative for SVB didn’t immediately return a request for comment.
“It has a long-established track record in the sector which supports its expertise, conservative underwriting, and better than peer asset quality performance,” ratings agency Moody’s Investors Service said last week as it downgraded the debt of the SVB Financial Group, the bank’s parent company.
The FDIC held an auction for the bank over the weekend, but no buyer emerged. Instead, the regulator created a bridge bank to house SVB’s deposits and has promised to make all of its customers whole. The FDIC declined to comment.
SVB Financial, the former holding company of Silicon Valley Bank, is also exploring the possibility of selling off other units including SVB Capital and SVB Securities.