In other SVB-related news, Financial Group, which was SVB’s holding company, is exploring ways to sell off its other units.
Private equity firm Apollo Global Management is reportedly interested in the loan book of the now-collapsed Silicon Valley Bank (SVB). The bank has made several headlines over the past week due to its debacle that affected the entire US banking sector. Regulators have taken over SVB and investors, including Apollo, have begun to take notice of the company.
Apollo among suitors looking to buy SVB parts
According to people familiar with the matter, Apollo is looking to buy parts from SVB. The sources revealed that the asset manager is looking at the bank’s loan book. As of December 31, 2022, the financial institution had loans for $73.6 billion. While SVB had billions of dollars in loans at the end of 2022, there is currently no information on the specific size of the loan book Apollo is interested in.
In addition, the bank had more than $175 billion in mostly uninsured deposits and $209 in total assets. These assets were long-term bonds that SVB was forced to sell at a loss amid rising interest rates. Other assets attributed to SVB are loans to start-up and growth companies. More include credit for wealthy entrepreneurs and venture capital funds.
During the week, the Federal Deposit Insurance Corporation (FDIC) made but there was no buyer. Now, the regulator created a bridge bank to accommodate SVB’s deposits.
In other SVB-related news, Financial Group, which was SVB’s holding company, is exploring ways to sell off its other units. Investment banking company JPMorgan Chase & Co (NYSE: JPM) has begun acquisition talks with the parent company. The sources who requested anonymity stated that the ongoing deal excludes SVB, which is now under US control.
As SVB falls apart and investors such as Apollo become the eyes of the company, many are beginning to believe that no company is too big to fail. This has also affected US stock futures. The US stock market, with futures linked to the Dow Jones Industrial Average (INDEXDJX: .DJI), fell 276 points on Monday. Futures linked to the S&P 500 Index also fell 1%, while the Nasdaq-100 lost 0.7%.
As a result of the uncertainty and fears in the market, the Federal Reserve, the Treasury Department and the FDIC issued a joint statement. According to them, while SVB shareholders do not have a bailout, depositors will have access to their funds. The statement says:
“Today we are taking decisive action to protect the US economy by strengthening public confidence in our banking system.”
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Ibukun is a crypto/finance writer interested in conveying relevant information, using non-complex words to reach all kinds of audiences. In addition to writing, he enjoys watching movies, cooking, and exploring restaurants in the city of Lagos, where he resides.
