Bidding War: Scaramucci’s SkyBridge Capital Competes for Silicon Valley Bank’s VC Unit

Anthony Scaramucci‘s SkyBridge Capital and Atlas Merchant Capital are competing for SVB Capital, the venture capital and credit-investment arm of SVB Financial Group, the former parent company of Silicon Valley Bank. 

Aside from the two investment firms, San Francisco-based private-equity firm Vector Capital is also bidding on the credit investment firm, the Wall Street Journal reported, citing people familiar with the matter. 

The court is expected to make a decision on the winning bidder in the coming weeks.

The potential deal for SVB Capital, which is currently in bankruptcy proceedings, could fetch between $250 million to $500 million. 

However, it is important to note that the transaction is not guaranteed and would still need to undergo review by the creditors’ committee. 

Silicon Valley Bank, one of the most popular lenders to Silicon Valley tech and growth startups, failed on March 10, falling into the hands of the Federal Deposit Insurance Corporation (FDIC). 

Subsequently, on March 17, SVB Financial Group filed for Chapter 11 protection in a New York bankruptcy court, enabling the sale of its assets after regulators seized control of the technology-focused lender.

In the aftermath, First Citizens Bancshares, a prominent regional bank, stepped in to acquire many of the loans and deposits of Silicon Valley Bank. 

Additionally, SVB Securities, the investment-banking division of SVB Financial, received approval in July to sell itself to founder Jeff Leerink and a group of eight senior managers for $100 million.

SkyBridge Managest Over $1.8 Billion

SkyBridge Capital, led by Anthony Scaramucci, manages a substantial portfolio of over $1.8 billion, including significant investments in digital assets totaling approximately $580 million. 

Scaramucci gained notoriety in 2017 when he was abruptly removed from his position as communications director for then-President Donald Trump after a mere 10-day tenure. 

Vector Capital, on the other hand, focuses on middle-market technology and technology-enabled businesses, while Atlas Merchant Capital operates out of New York and London, offering investment strategies in both public and private markets.

It is worth noting that the collapse of Silicon Valley Bank came just two days after crypto-friendly bank Silvergate collapsed.

Silvergate was among the lenders hit hardest by the fall of FTX in November last year. 

The crypto bank suffered a run following the collapse of FTX and had to sell $5.2 billion of debt securities it was holding on its balance sheet at a significant loss to cover around $8.1 billion in user withdrawals. 

In the latest development around the recent banking crises in the US, the FDIC has been grappling with nearly $13 billion worth of hard-to-sell mortgage bonds following the collapse of Silicon Valley Bank and Signature Bank. 

The bonds, backed by long-term, low-rate loans primarily used for affordable apartment building projects, were part of a $114 billion portfolio that ended up under the control of FDIC when it took over the failed banks.