Banking

SVB bulks up in investment banking with tech hires

SVB Financial is betting that the technology sector’s strong run of high-priced acquisitions and lofty initial public offerings will continue.

The parent company of Silicon Valley Bank recently added 10 senior executives who specialize in technology to its investment banking arm and plans to add more bankers by the end of the year. SVB hopes to retain its tech sector clients as they grow and start to require more complex investment banking needs, CEO Greg Becker said.

“We already have the relationships and trust and connectivity with the companies that will want to go public at some point,” Becker said.

“We’re making sure we have a broad enough capability to cover M&A, equity capital markets, research,” said SVB Financial CEO Greg Becker, “so we can cover anything a tech company could want.”

Bloomberg

SVB Financial moved into investment banking for health care and life sciences firms in 2018 when it bought Boston-based Leerink Partners. Earlier this year, the $163 billion-asset company bought Boston Private Financial Holdings to build out its private banking and wealth management capabilities.

The investment banking business will ultimately add between $100 million and $150 million in revenues, SVB executives estimated on a conference call earlier this year.

SVB’s expansion in investment banking is well-timed, given the high number of IPOs and M&A deals in the tech sector today, said Tim Coffey, an analyst at Janney Montgomery Scott.

“This is a market where, right now, there is demand for what they’re doing because of low interest rates and the overall health of the private equity and venture capital markets,” he said. “A lot more private companies are going to become a lot bigger, and there’s definitely a demand to work with that skill set.”

SVB Financial has historically done business with private equity and venture capital firms as well as the technology companies that they finance. But as those clients’ financial needs became more complex, they would sometimes outgrow the Santa Clara, California-based bank, according to Coffey.

“Adding this tech vertical will help keep those tech companies in the ecosystem,” he said.

Although the company’s investment banking arm, SVB Leerink, previously served the life sciences and health care sectors, the technology industry has a wide variety of sub-sectors that all require their own unique expertise, Becker said.

SVB added sector experts in enterprise software, the consumer Internet, commerce enablement and marketing software, education technology and services, digital infrastructure and equity private placements, as well as support staff. It still has plans to add expertise in equity capital markets, fintech and other areas.

SVB hired Jason Auerbach to head up the new team, naming him co-head of investment banking. Previously, Auerbach worked at UBS as global co-head of technology, media and telecommunications investment banking. Earlier in his career, he was the global co-head of technology, media and telecommunications investment banking at Jefferies.

“By the end of this year, we should have roughly 50 people on the technology investment banking team,” Becker said. “We’re making sure we have a broad enough capability to cover M&A, equity capital markets, research, so we can cover anything a tech company could want.”



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