SVB Financial Group to Explore Strategic Alternatives

The Business Journal

On March 13, 2023, SVB Financial Group (SVBFG) announced through a press release via PRNewswire that it has formed a committee of five independent directors to investigate various strategic options for the holding company, as well as its SVB Capital and SVB Securities divisions, and other investments. It is important to note that these two businesses are distinct parts of SVBFG and are not associated with Silicon Valley Bank, which is currently being resolved by the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve. The company's board of directors has taken this step to explore possible alternatives and ensure the best possible outcome for SVBFG and its stakeholders.

- SVB Capital is a fund platform that focuses on venture capital and private credit, with a strong connection to the innovation economy. Despite the ongoing resolution process for Silicon Valley Bank, SVB Capital will continue to operate independently and provide high-quality services to its clients. The platform's management team has a proven record of success, and SVB Capital funds are separate legal entities that are distinct from Silicon Valley Bank. This means that investor commitments and portfolio investments are owned by the SVB Capital funds and not subject to the resolution process. SVB Capital has its own underwriting and investment committee processes that are separate from Silicon Valley Bank.

- SVB Securities is a top investment bank that specializes in serving the innovation economy. The broker-dealer offers its clients a wide range of capital market and advisory solutions, as well as in-depth expertise and knowledge of the sector. The ongoing resolution proceedings for Silicon Valley Bank will not directly impact the business operations of SVB Securities, which will continue to operate without interruption under the leadership of its management team. Since its acquisition by SVBFG in January 2019, SVB Securities has maintained its financial and operational independence, operating as a standalone subsidiary. The firm has a strong client base and solid financial position, with a healthy balance sheet, significant excess net regulatory capital, and no outstanding debt.

The restructuring committee established by the holding company is made up of five members: Eric Benhamou, Tom King, Kay Matthews, Mary Miller, and Kate Mitchell. The committee's mandate includes investigating potential transactions for SVB Capital and SVB Securities, as well as exploring all alternatives for addressing the approximately $3 billion of funded debt that is held by the holding company. This debt is only recourse to SVB Financial Group and is not guaranteed by its subsidiaries. To carry out these activities, the holding company is receiving advice from Centerview Partners LLC, Sullivan & Cromwell LLP, and Alvarez & Marsal, who will act as its financial, legal, and restructuring advisors respectively, in collaboration with the committee.

About SVB Financial Group

SVB Financial Group (Nasdaq: SIVB) is a holding company for SVB Capital and SVB Securities, with its headquarters based in Santa Clara, California.

Forward-Looking Statements

This press release includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are subject to known and unknown risks and uncertainties, many of which may be beyond the control of SVB Financial Group. Forward-looking statements are not historical facts and typically include words such as "becoming," "may," "will," "should," "could," "would," "predict," "potential," "continue," "anticipate," "believe," "estimate," "seek," "expect," "plan," "intend," or comparable terminology.

While SVB Financial Group believes that its forward-looking statements are reasonable, they are based on current beliefs and assumptions, which may prove to be incorrect. As forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that may be difficult to predict and many of which are outside of SVB Financial Group's control. 

Therefore, forward-looking statements regarding offerings and the actual results of SVB Financial Group's operations and financial performance may differ significantly from those expressed or implied by such statements. The forward-looking statements in this release are made only as of the date of this release, and SVB Financial Group does not intend to update these statements or undertake any obligation to do so. 

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