(Reuters) – SVB Financial Group said on Sunday it had reached an agreement to sell its investment banking division, SVB Securities, to a group led by Jeff Leerink and backed by funds managed by The Baupost Group.
The group of bidders led by Leerink, who is the managing director of SVB Securities, will acquire the investment banking business for a combination of cash, redemption of an intercompany note and a 5% equity instrument, said said the company.
MoffettNathanson LLC, the company’s research business, was not included in the transaction, the collapsed lender said, adding that it will remain part of the company.
The deal comes after the Federal Deposit Insurance Corporation (FDIC) took control of Silicon Valley Bank in March after depositors rushed to withdraw their money in a bank run that wiped out more than half of the market value of several U.S. regional lenders and triggered the worst banking crisis since 2008.
First Citizens BancShares Inc purchased all of the failed bank’s loans and deposits in March, leaving some $90 billion worth of securities for sale to the FDIC.
The lender continues to evaluate strategic alternatives for its division, SVB Capital, and the company’s other assets and investments, he said.
The collapse of SVB in March reverberated around the world, forcing US depositors to flee smaller banks for bigger cousins, while the blow to confidence forced Credit Suisse to withdraw. throw into the arms of its rival UBS.
(Reporting by Akanksha Khushi in Bengaluru; Editing by Leslie Adler)