Silicon Valley Bank, or SVB Financial Group, made just over US$2bn in investment banking fees in the past decade, mostly from equity capital markets deals for companies in the healthcare sector, Refinitiv data show. The US government stepped in on Friday to save SVB Financial Group, making it the largest US bank to fail since the 2008 financial crisis.
California-based SVB brought in US$261.6m in fees from debt and equity underwriting, M&A advisory and syndicated loans in 2022, the Refinitiv data show. Its peak years for fees were 2020 and 2021, when it brought in US$371.9m and US$364.6m. It had made US$55.3m in fees this year.
SVB's investment banking fees since the start of 2013 totalled US$2.06bn. Some US$1.63bn of that came from equity capital markets activity, which includes initial public offerings and follow-on share sales. Another US$328m came from M&A advisory work, with US$98m coming from syndicated loans and just US$8m from bond underwriting, the data showed.
SVB Securities, the investment bank arm of SVB, said on Saturday the collapse of SVB would not directly impact the broker-dealer’s business operations, which it said continued under CEO Jeff Leerink. It did not immediately respond to a request for comment.
SVB Securities is based in Boston and was formed when SVB Financial Group bought Boston-based healthcare boutique Leerink Partners in January 2019. Leerink Partners was led by Jeff Leerink. SVB said at the time the purchase complemented its commercial banking and lending products with the full suite of investment banking services focused on healthcare and life science companies. It paid US$280m for the business, plus US$60m in retention pay for staff over five years.
SVB is a leading bank for start-up companies. It was a leading lender and adviser to technology companies, and that spans multiple industries.
Some US$1.82bn of SVB's fees since 2013, or 88%, has come from clients in the healthcare industry, the data showed. Healthcare and life sciences has been transformed by technology in recent years to fight illness, develop new vaccines and medicines or help people monitor and analyse their health. SVB said its areas of expertise span biopharma; digital health and healthtech; healthcare services; medical technology; and tools and diagnostics.
Another US$98m of SVB's fees came from companies in the high-technology sector and US$68m was from financials companies, which can include financial technology firms.
SVB Securities said last month it had expanded in recent years and had more than 70 technology investment banking professionals. It was making senior hires, including adding Scott Silverglate last month from Goldman Sachs, where he was global head of industrial software.
SVC Securities said it has completed 1,160 transactions since 2019 that have raised more than US$230bn.
It has often advised on fundraisings of between US$100m and US$300m. This month, it was joint bookrunner on a US$300m follow-on deal for Revolution Medicines, a US$195m follow-on for Clearwater Analytics and a US$108m follow-on for Stagwell. Other recent deals include joint bookrunner on a US$200m follow-on for Travere Therapeutics, lead placement agent on a €130m private placement for Abivax, and exclusive financial adviser to Swiss insulin therapy firm AMF Medical on its sale to Tandem Diabetes Care for up to SFr200m (US$219m) in December.
Refinitiv data showed US$1.82bn of SVB's fees in the past decade came from the Americas. Another US$185m, or 9%, came from Europe.
HSBC stepped in on Monday to buy SVB’s UK arm in a fire sale, brokered over the weekend by the UK government and Bank of England, keen to limit the spread of the crisis to the UK tech sector. HSBC CEO Noel Quinn said the acquisition for a symbolic £1 made “excellent strategic sense”. The business had about 3,300 UK clients, including start-ups, venture-backed companies and funds.
"It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life science sectors, in the UK and internationally," Quinn said.
The US Federal Deposit Insurance Corporation stepped in on Friday as a receiver in the US to protect depositors. SVB had 17 branches in California and Massachusetts. It had US$209bn in total assets.
Updated story: Adds detail