Since the Silicon Valley Bank failure, the FDIC has refused offers to sell the bank’s loan book as bidders continue to lurk. Companies like Apollo Global Management want to buy the loan book, but the FDIC’s preference is for a single buyer for all of SVB’s related assets, including the loan book.
Why it matters: Apollo is working with venture capital firms to shore up possible funding to buy SVB’s loan book in exchange for the VC firms bringing their lending business to Apollo. While Apollo is not interested in becoming a bank, by hiring SVB’s relationship bankers, it could gain the upper hand in commercial business.
- SVB’s umbrella includes the flagship commercial bank, private banking, the investment banking branch, a loan portfolio, and a venture capital investment portfolio.
- On a call with venture capitalists, the new SVB CEO, Tim Mayopoulos said the plan is to sell the bank to a single buyer and not trying to parcel pieces of the bank to potential buyers.
- The US has not had a bank failure of this magnitude for a couple of decades, and it will be interesting to see how this shakes out as the FDIC deals with venture capitalist firms willing to buy only a portion of the bank, without devaluing the entire commercial bank it is trying to sell.
