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SBV updates from Schroder UK Public Private and Seraphim Space

Seraphim Space (SSIT) has commented on the recent events concerning Silicon Valley Bank (SVB). SSIT confirms that it does not bank with SVB, nor does its investment manager, Seraphim Space Manager LLP. However, eight of SSIT’s portfolio companies use SVB as their primary banking provider. SSIT says that it does not anticipate that the recent SVB events will have any impact on the company’s NAV, but the manager will continue to closely monitor the situation and SSIT will update the market as appropriate.

Schroder UK Public Private (SSUP) has also provided the following update: 

”Following the closure of SVB by the California Department of Financial Protection and Innovation on Friday 10 March 2023, the company welcomes the statement on Monday 13 March 2023 from The Federal Deposit Insurance Corporation confirming the transfer of all deposits and substantially all assets of the former Silicon Valley Bank of Santa Clara, California, to a newly created, full-service FDIC-operated ‘bridge bank’ in an action designed to protect all depositors. As such, SVB depositors will have full access to their money beginning the morning of 13 March 2023, when Silicon Valley Bank, N.A., the bridge bank, opens and resumes normal banking hours and activities.” [QD comment: We believe the action taken by regulators in the US and UK  is a positive outcome. It is easy for interventions such as this to become politicised, however quick action to provide access to funding in these scenarios is crucial to ensure that something more economically destructive does not occur.] 

“The company further welcomes the statement on Monday 13 March 2023 from the Bank of England that it has taken the decision to sell Silicon Valley Bank UK Limited, the UK subsidiary of the US bank, to HSBC UK Bank . This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector, and supporting confidence in the financial system. The BoE and HM Treasury confirmed that all depositors’ money with SVBUK is safe and secure as a result of this transaction. SVBUK’s business will continue to be operated normally by SVBUK. All services will continue to operate as normal and customers should not notice any changes.” [QD comment: The purchase of SBVUK by HSBC looks like a sensible move given the underlying business, recent events aside. It is somewhat of a surprise that there has not yet been a similar outcome in the US.] 

Schroder UK Public Private’s exposure

  • SUPP has no direct banking relationship with SVB.
  • SUPP’s underlying portfolio companies have a range of banking relationships which in some instances include SVB and SVBUK. While the review of the portfolio is ongoing, on the basis of the information the manager has available, the company’s estimated indirect exposure across its portfolio is ~0.8% of NAV.
  • Schroders Capital Management (Switzerland) AG as delegated portfolio manager of the company and its funds have no direct banking relationship with SVB. Therefore there is no direct exposure from its funds or mandates.

SUPP/SITT : SBV updates from Schroder UK Public Private and Seraphim Space

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