Member Info for sageoflondon

Nothing to say they have relationship with SVB though?

I can't imagine they would do that for a foreign bank - unless retail customers.....is there a past history of doing so? The corporate customers were reimbursed when assets were realised I believe re icelandic banks. Kent County Council had £50m in those and Transport for London £40m back in 2008 - i.e. I don't believe it was a government bail out as it was for retail customers.

SVB is gone without rescue. No coming back from that. Can you imagine the withdrawals piling up as soon as it opens. It may get rescued but who knows.

Cash and liquidity must be of some concern - it doesn't look like there is a lot left in the kitty. That isn't a problem in normal times - you just liquidate something. In the current market that isn't happening. If you want to sell then you are going to be a price taker. The NAV is irrelevant almost here, this is about liquidity at a Grow and portfolio company level. Whether SVB impacts is about how much Grow and any of the portfolio companies have on deposit or how reliant they are on any credit facility if relevant - either way it's not going to be positive for liquidity market wide and is only going to exacerbate the current funding drought.

It's lost money on bonds as a result of having to sell those bonds due to deposits drying up from it's technology customer base - it's also what that says about funding position of a lot of that customer base.

That doesn't sound ideal - but again depends how much. It also depends if that has a large impact on ability to continue to pay the bills etc. I have no idea on things like that.

Surely there is something in the tank in terms of liquidity though - I'm not sure if they would have been able to draw on the RCF given it looks like the system wasn't processing withdrawals - but I don't actually know that. If they were virtually fully drawn a while back then in itself might have little direct exposure - valuations in the whole sector will however be hit.

Yes ultimately if the parent co is gone, there is little hope for the ringfenced UK bit.

Really no idea where this leaves Grow - this will take a lot of unpicking. That runs all the way from moderate impact, need to renegotiate RCF with another bank etc, through to loss of deposits and investee cash etc, right through to how do they run the business.

https://seekingalpha.com/article/4586342-svb-financial-today-wasnt-run-on-bank-it-was-sprint

Any run on a bank like SVB is always going to be faster - it isn't dealing with retail investors who 'draw' money out by standing in line - these are tech savvy electronic large corporate deposits that move and most will already have sprinted away

For retail depositors yes - i.e. if you have £85k deposited as an individual that should be protected - but that's probably not relevant really. I'm not sure about large corporates etc. they receive virtually no protection anyway as such. So any additional protection would depend on how that ringfenced UK bank was capitalised - that's something I have no idea on. Regardless this looks like it could have a massive impact - much wider that those with deposits etc.

Always better to remove as you never know. In those events the normal rules don't apply and people will save their own skins first, with little regard for others or the rules - it happens.

I recall that sinking feeling when your withdrawal doesn't arrive (way before public announcements) from a bank (Icesave) - I was taking the money out to pay for something and it wasn't a small sum - eventually got it back - in like 3 months or so - stopped me purchasing what I was purchasing.

love that line 'some VCs have urged calm' - yes whilst they run as fast as they can to get all of their money out before others!!

ok - I wasn't aware of that. I would imagine a fair few technology players do. I would also imagine they are very busy doing what they can to withdraw their funds immediately.

We don't know if they have funds on deposit, there is nothing to suggest they do, other than the fact they have a relationship with SVB by way of the RCF. Most companies use a number of banks and should be spreading risk appropriately. SVB is a regional bank so I wouldn't expect Grow to have much on deposit with them - but I could be wrong. I would expect a statement if they do. What would concern me is if any portfolio companies use SVB - I have no idea on this - it isn't publically available information, but SVB are technology focused.

Always the same with bank runs. I think SVB is gone.

I had actually forgotten that Molten has it's RCF in part with SVB. Just checked now, JP Morgan and SVB.

Even bigger issue for those tech companies with funding deposited there - to withdraw or not, no one wants to be last out of the door as the safe will potentially be empty. One of the larger banks will pick SVB up for cents on the dollar I would imagine. Short term however this could well cause difficulty for many companies that are reliant on SVB. I expect we will wake up to some sort of solution tomorrow.

There are going to have been a lot of very late nights in Silicon Valley and at SVB last night. It looks like SVB might not survive - who knows, I think it would likely be rescued anyway. Either way some significant market falls today, particularly in the technology space.