Silicon Valley Bank spent the last two years hiring investment bankers. Now what?
If you work for Silicon Valley Bank, you may be spending this weekend touching up your resume. Following Friday's throttling of the US and UK operations by regulators, the future looks less certain than it did before and rival banks are already thinking of picking people off.
"We are trying to identify and potentially hire good M&A bankers from SVB," says the New York-based chief operating officer of one US banking boutique, adding that SVB's closure by regulators on both sides of the Atlantic stands to create a lot of work for both financial institutions group (FIG) and technology bankers. "There's going to be a massive amount of restructuring work here for SVB and its investors, plus for all the companies that SVB lent money to," he says. "There will be a massive liquidity squeeze for companies that bank with SVB."
The other seemingly good news is that while Silicon Valley Bank has now gone into receivership and is being run by the Federal Deposit Insurance Corporation in the US, SVB Securities, Silicon Valley Bank's "standalone subsidiary" investment banking subsidiary, says it's unaffected by Friday's maelstrom. In a press release issued on Saturday, it said its business continues "uninterrupted" and that it has "a strong client base and solid financial position, with a healthy balance sheet, significant excess net regulatory capital, and no outstanding debt."
In total, SVB employed 8,550 employees globally at the time of its last annual report. 6,800 were based in the US; 700 were in the UK. The remainder were scattered between Israel, Canada, China, Germany, Hong Kong, Ireland, Denmark and Sweden. Most are retail and corporate bankers, but SVB Securities specifically has 350 staff registered with FINRA in the US alone, and they include technology investment bankers and leveraged finance professionals.
The latter were mostly added in a hiring rush over the past two years. In 2022, overall headcount at SVB increased by nearly 2,000 people. In London, the new recruits included an array of junior leveraged finance professionals, many of them added from NatWest and HSBC. They supplemented a more established, but also growing, technology-focused leveraged finance team in America.
However, some of SVB's most prized employees are its technology-focused investment bankers working with SVB Securities in the US. Silicon Valley Bank began building a technology investment banking group in 2021 when it hired Jason Auerbach, the former head of TMT investment banking at UBS. By the end of last year, SVB Securities had a technology investment banking team of more than 80 people, focused on software, internet, financial technology and IT services.
Much of that team is made of experienced technology banking talent from major banks. At least six senior hires were drawn from UBS: Nathan Laverriere, William Goodman, Christopher Montgomery, Bob Casey, Robert Jackman, and J.T. Stephens. Georgi Balinov and Henry Pinnell joined from Barclays. Matt Lytle joined from Goldman Sachs.
In today's statement, Jeff Leerink, CEO of SVB Securities, said "SVB Securities is financially stable and will continue to operate as usual." Leerink himself joined SVB in 2018 when the bank acquired his firm, Leerink Holdings LLC. For four years, the subsidiary was called SVB Leerink, but this was changed to SVB Securities in February last year. Leerink may now want to consider reverting to his previous eponymous nomenclature.
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