Silicon Valley Bank wealth management sale could be quick

There are rumors that several large, well-known aggregators of RIAs are circling SVB Private and its $17 billion in assets.

The sale of the $17 billion in assets overseen by the wealth management arm of the out-of-business Silicon Valley Bank, which bank regulators seized last Friday, seems likely to happen quickly, market sources said Thursday. But any details about the list of potential buyers, or the restrictions facing financial advisors at the firm who want to move their businesses to a new shop, remained hazy.

InvestmentNews reported Monday that bankers and buyers were lining up to kick the tires of Silicon Valley Bank’s wealth management business, SVB Private, which includes the bank’s 2021 acquisition of Boston Private Holdings.

Industry sources this week cited rumors and speculation that several large, well-known aggregators of registered investment advisors were circling SVB Private but had no first-hand knowledge of an impending bid or offer for the firm.

Silicon Valley Bank was seized by regulators amid a run on deposits and an aborted push to raise capital. The Federal Deposit Insurance Corp. is now finding buyers for SVB’s various businesses to return as much money to the bank’s clients as possible.

“I don’t think the advisors at SVB are going to run for the gates,” said one investment banker, who asked not to be named. “People have lined up since last Friday to buy them. But it’s unsure how this shakes out with financial advisors and the details of their contracts, like any noncompetes or time off for garden leave.”

“It will sell and probably quickly,” the banker added.

“The Silicon Valley Bank wealth management business is a perfect fit to go to a mega-sized acquirer that has a common RIA custody relationship,” said Lou Diamond, an industry recruiter. “That’s the ideal fit. The advisors there are much more RIA-focused from the old Boston Private than they are bank guys.”

According to the Form ADV for SVB Wealth, another name for SVB Private, SVB uses Fidelity Investments, Charles Schwab & Co. and its parent bank as a custodian, meaning it would be easy for advisors using Fidelity and Schwab to hold onto client assets. The outcome for moving assets held at the bank is less clear.

SVB’s private bank and wealth manager offers conventional products like mortgages, lines of credit, and tax and trust services, along with the not so conventional, such as vineyard development loans.

Meanwhile, the investment bank, SVB Securities, touts its services to firms in industries including software, digital infrastructure, fintech, medical devices and biopharma, according to Bloomberg News. It advised on about $9 billion in M&A transactions last year, ranking 83rd globally, Bloomberg league tables show. The unit had a loss of $95 million in 2022 on revenue of about $508 million.

With a contribution from Bloomberg News