Silicon Valley Bank’s Assets Are for Sale, but No One Is Buying Yet

Five days after seizing control of Silicon Valley Bank, federal regulators were still in the process of auctioning off its remaining parts, but no single buyer appeared willing to take on everything.

SVB collapsed last week after a run on deposits left it insolvent. Federal officials committed to paying out all depositors in full, even if the bank didn’t have sufficient funds, and planned to sell off its assets, partly as a way of doing so.

The Federal Deposit Insurance Corporation has conducted the stop-and-start auction process, people briefed on the efforts said, and on Wednesday it had a significant way to go. Before SVB collapsed, it made a slew of loans to technology companies, venture capitalists and wealthy individuals — debt that should still be seen as valuable.

It also held stakes in venture capital firms and venture-backed companies and operated a fledgling investment bank of its own. Despite the market tumult since the bank’s collapse, those investments could collect a tidy sum, if the F.D.I.C. can find buyers, and defray the cost of paying out depositors.

But bankers who have been briefed on the offerings say some of the biggest potential bidders have demurred. Before the bank was seized on Friday, JPMorgan Chase and Bank of America — the two largest banks in United States by assets — turned down opportunities to acquire SVB, the people said.

The latest deadline for bids is Friday evening, though subsequent auctions may follow as all of the bank’s various arms are dispersed, one banker said.

An F.D.I.C. spokeswoman declined to comment, saying that “we do not discuss these kinds of details.”

The bank exists now on an interim basis under the name Silicon Valley Bridge Bank. On a call with customers on Tuesday, its new chief executive, Tim Mayopoulos, said its future was uncertain. He laid out three options: continuing to operate for a period as a stand-alone bank; raising new money, a move that SVB tried unsuccessfully last week; and winding down entirely.

After SVB’s collapse, JPMorgan and Bank of America received new entreaties to take on pieces of the bank’s loans and investments, but stood pat. Among their reasons: JPMorgan’s chief executive, Jamie Dimon, has been outspoken about harboring difficult memories of the bank’s last major intervention in a rival’s fall — its 2008 government-orchestrated takeover of Washington Mutual. That went so poorly that JPMorgan later sued the F.D.I.C. for unpaid bills, litigation that was eventually settled.

Bank of America, too, is so much larger than SVB — it has nearly $2 trillion in deposits, versus under $200 billion for SVB — that it decided the bank wasn’t worth taking on, a person familiar with the decision said.

Goldman Sachs, still grappling with the aftermath of its own misadventures in consumer banking, has also thus far passed on making an offer, one person said, though Goldman’s investment bank worked with SVB on shoring up its finances in the days before the collapse.

Other potential buyers are circling. The investment giants Apollo Global Management and Blackstone have discussed making bids for part of Silicon Valley Bank’s loans, perhaps in concert with venture capital funds that had deep ties to the bank. Apollo’s interest was reported earlier by Bloomberg News.

Before its collapse, SVB said it served nearly half of venture-backed companies in the United States. Its British subsidiary, a tiny part of the bank’s operations, was sold on Monday to HSBC for one British pound.

At least one big Wall Street name has been jostling to get into the action. The billionaire investor Bill Ackman — not particularly well known as a bank investor — has been encouraging business associates to get involved, three people with knowledge of the matter said. At one point, Mr. Ackman expressed interest in participating in a consortium that would help the fallen bank, two of the people said.

Lauren Hirsch and Emily Flitter contributed reporting.


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