Who will get SVB Financial’s fund-of-funds assets? TA pauses fundraising on double-down pool

Morning Hubsters!

This is Chris, on for Wire Wednesdays.

So, what’s been going on this week, anything interesting …?? Heh

Asset sale: As we track the disposition of Silicon Valley Bank’s assets, we’re mostly tracking non-bank assets from SVB parent, SVB Financial Group. SVB Financial has business units including a long-time fund-of-funds operation called SVB Capital that managed around $9.5 billion as of February, according to the company’s annual report. The fund of funds has commitments to some of the biggest names in venture capital and growth equity, according to its website.

There’s been rumblings of potential buyers circling the non-bank assets, but now, if a SVB Financial bondholders group gets its wish, the process may have to go through bankruptcy court, according to a report from Wall Street Journal.

The bondholders’ group, which includes Centerbridge Partners, is being advised by PJT Partners. It wants the parent company to file bankruptcy and auction its non-bank businesses through the court process, according to WSJ. The bondholders group holds a large portion of SVB Financial’s $3.4 billion face value of bonds, WSJ said.

Meanwhile … SVB Capital began raising its eleventh fund last year and had collected about $1.9 billion as of December, according to SEC filings. It closed its tenth fund on $1.25 billion in 2021, which was generating a 1.07x total value to paid-in multiple and an 8.40 percent IRR as of June 30, 2022, according to performance information from Florida Retirement System Trust Fund.

Beefy: Trivest Partners is fattening up its food distribution platform Miami Beef at a time when meat alternatives have grabbed a larger portion of market share. The firm believes there is still a large appetite for real beef. Trivest made a non-control investment in Miami Beef in 2022.

Miami Beef recently completed a pair of add-ons: Brooklyn Burger, which distributes frozen burgers throughout the US in retail locations and grocery stores with a concentration in the northeast; and Devault Foods, which supplies fresh burgers, meatballs and other beef and meat products throughout the northeast and midwest.

“While there was a lot of talk about meat alternatives in recent years, there’s recently been a reversion of that trend,” Jonathan Schonfeld, vice president at Trivest, told PE Hub reporter Georgina Tzanetos. “We’re seeing continued growth in consumers opting for premium beef products on a consistent basis.“

Instead, Schonfeld highlights, consumers are opting into more high-quality proteins vs. traditional beef products that may contain soy or other additives. Think supermarket frozen beef patties of the past that had more than just “beef’ listed in their ingredient make-up.

“Miami Beef, Brooklyn Burger and Devault Foods all focus on high quality, better-for-you beef products,” Schonfeld said. Consumers still want meat, but are perhaps better educated now than in years past and aren’t interested in settling for lesser quality.

Signals: We’ve been watching the implications of the tightening PE fundraising market. We’re expecting to see funds close below target, longer marketing periods and more LP friendly terms. Another consequence could be GPs delaying or even dropping ancillary strategies to focus on core funds.

One example that has emerged is TA Associates, which launched fundraising recently on its flagship pool along with its third Select Opportunities fund, which together were targeting around $16 billion.

TA recently told LPs it was pausing fundraising on the Select Opportunities fund to focus solely on its flagship fund, which an LP said could reach $16 billion or more all on its own. Sources told Buyouts the Select Opportunities fund, which reinvests back into existing TA portfolio companies the firm is selling, received a less enthusiastic reception from potential LPs than expected. It’s possible the fundraising was a victim of the current market, where LPs have limited capital to go around as cash flow slows in the sluggish exit environment.

Book rec: Here’s one: I just finished an out-of-print financial thriller called The Crash of ‘79 about a banking panic spurred by geopolitical turmoil, among other things. Quick read and some interesting ideas.

That’s it for me! Hit me up at cwitkowsky@buyoutsinsider.com or find me on LinkedIn with tips n’ gossip, feedback or book recommendations.