Peter Warburton, chief economist with research group Economics Perspectives, quoted in The Guardian.

First look

SVB’s debt funds outside the FDIC process
Silicon Valley Bank, seized by the Federal Deposit Insurance Corporation at the end of last week, was one member of a broader family of entities. The other entities – including SVB Capital, a venture capital and private credit fund platform – continue to operate.

The FDIC seized SVB proper, a subsidiary of the holding company, SVB Financial Group. SVBFG released a statement Monday morning that its board has “appointed a restructuring committee consisting of five independent directors to explore strategic alternatives” both for SVPFG and for SVB Capital, along with other assets.

The release makes the point that SVB Capital is a legal entity outside of the resolution process underway for the bank. Likewise, its funds and the underwriting and investment committee, are not subject to that process.

Private Debt Investor data indicates that SVB Capital has two funds in market: Innovation Credit Income II and Innovation Credit Growth Fund II. Each is a venture debt fund with a North American focus. The growth fund launched in December 2021 and held a first close of almost $617 million in December 2022. The income fund launched in July 2022 and has as yet no reported close.

According to its website, SVB Capital has assets under management of $8.8 billion across all funds.

The FDIC’s move is comparable to its seizure, in September 2008, of Washington Mutual, the one-time savings-and-loan giant. Elements of the WaMu matter may serve as a cautionary tale for all parties to SVB.

In 2008, as in 2023, the holding company (WMI) was left independent once the operating company was seized. But the seizure was such a hasty affair, under emergency conditions less than two weeks after the bankruptcy filing of Lehman Brothers, that there was little attention paid to the question of which assets were actually seized and which were left with WMI.

WMI filed for bankruptcy the day after the seizure, and the issue of the assets still in its possession had to be hashed out within the bankruptcy court. That uncertainty was part of the reason the restructuring could not be completed until March 2012.

Legal & General boosts emerging market debt fund
By acquiring a significant minority stake in ImpactA Global, Legal & General Capital, the insurer’s alternative assets platform, is making an impact in multiple ways, according to affiliate title Infrastructure Investor (registration required).

The first and most direct is its backing of a women-led impact investment advisory firm. Headquartered in London, ImpactA is founded by two JPMorgan veterans – Isabella da Costa Mendes and Victoria Miles.

Indirectly, Legal & General’s investment, financial details of which it declined to disclose, will support ImpactA’s mission of providing debt financing for sustainable infrastructure in Latin America and Africa.

The firm has launched an infrastructure debt fund focused exclusively on emerging markets, that will address three key sectors: clean energy and renewables; sustainable mobility; health and water. The 10-year fund “will provide senior debt alongside official sector creditors and some mezzanine debt”, da Costa Mendes said, adding that the average ticket size will range from between $15 million-$30 million.

But, in addition to the above, we expect Legal & General’s backing had another positive impact: it gave ImpactA’s founders further cause for celebrating International Women’s Day.

And another thing…
With International Women’s Day still very much in mind, we would urge you to continue making nominations for our Women of Influence in Private Markets 2023. The deadline is Wednesday 22 March and you can take part here.

Essentials