Bill Ackman says that the US should consider SVB rescue as a possible alternative
(Bloomberg) — The U.S. government should consider a “highly dilutive” bailout for SVB Financial Group if a private equity solution cannot be offered, according to Pershing Square founder Bill Ackman.
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Companies supported by venture capital use SVB both for loans and operating cash. The government may also choose to guarantee deposits in exchange for warrants to enable the firm to raise new funds, he said.
The managing director of SVB Financial Group, Greg Becker, chose on Thursday to allay concerns about the bank’s financial position, and recommended that customers “keep calm”[ads1];.
SVB runs to prevent bank runs as fund giants advise withdrawing cash
The bank’s clients include venture capital investors, and Becker asked them to support the lender just as it has supported them for the past 40 years, according to people familiar with the matter.
Bear Stearns, the investment firm that failed during the 2008 global financial crisis, was later bought by JPMorgan Chase & Co., a move that CEO Jamie Dimon has since said he regrets.
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