Invesco, Franklin among firms that added SVB before fallout
2 min read . Updated: 15 Mar 2023, 02:00 PM IST
PremiumAsset managers including Invesco Ltd. and Franklin Resources Inc. added shares of SVB Financial Group in the months before the collapse of Silicon Valley Bank wiped 60% off its stock value in a single day
Months before the collapse of Silicon Valley Bank, the tech firms lender received investment from asset managers like Invesco Ltd and Franklin Resources Inc. The collapse of the SVB wiped 60% off its stock value in a single day.
The two firms were in the list of top investors in the bank, that also included Two Sigma Investments, DE Shaw & Co., Renaissance Technologies LLC and BlackRock Inc., according to the data compiled by Bloomberg from fourth quarter and more recent regulatory filings and other fund documents.
Notably, a global market fear erupted when Silicon Valley Bank's technology startup clients and investors fled last week, causing SVB's collapse. Immediately after SVB, Signature bank and Silvergate also collapsed last week. The incident spurred the second-biggest bank failure in US history. The swift collapse sent shockwaves across the tech and finance industries, prompting the government to protect client deposits.
SVB used to be an attractive haven for investors before its collapse
SVB has managed to lure some of the world's biggest asset managers, be it passive, active or hedge funds. Franklin Resources' nearly $7.2 billion Franklin Mutual Shares Fund owned $134 million worth of SVB shares at the end of January, reported Bloomberg.
Its several small firms had small exposure to debt of Silicon Valley Bank, failed Signature Bank and Silvergate as of March 9, reported BB citing a report published on its website. It is not clear whether some of them still held the shares, especially for quant firms like Two Sigma and Renaissance.
Two Sigma's one million share position in the fourth quarter regulatory filing reflected only its holdings on the last day of the year, reported BB citing a person familiar with the matter. The position of Two Sigma's was cut by half before the collapse of SVB.
On the other hand, RBC Global Asset Management UK sold its entire stake from the company in the fourth quarter. If it had held the shares till now, it would have been worth $248 million at the end of December. Axiom Investors also exited during the period, when its stake would have been valued at $61 million.