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SVB

Tracker: The banks scooping up ex-SVB talent

HSBC, Stifel and Moelis & Co. have added at least 50 senior bankers from Silicon Valley Bank since its collapse.

Silicon Valley Bank has faced a mass exodus of top talent to competitors in recent months, many of whom had been senior bankers with tenures of more than a decade.

So far, HSBC is the biggest recruiter of executives fleeing SVB. It has brought on at least 28 high-level bankers since March, according to a PitchBook analysis of the departures.

The majority of the hires have been at competing financial institutions: Stifel, MUFG, Moelis & Co. and JP Morgan Chase have all also jumped into the fray to sweep up talent as they seek to build or expand units dedicated to tech innovation, venture capital and venture debt.

At least 78 professionals at or above the level of director have departed since the bank’s collapse and subsequent sale to First Citizen Bank in March.


 
 

As the banking crisis started to unfold, employees at SVB were watching to see whether the bank would find a buyer.

“When all of it was going down, I think everyone was trying to wait to see what was going to happen,” Diane Gilley, partner at executive search firm Odgers Berndtson, said. “For the folks who feel like they are possibly most at risk [of redundancy], you’ll start to hear from some of those executives in the next month or two.”

First Citizens purchased $72 billion of SVB’s assets and took over most of the bank’s operations in March. As a result, First Citizens’ deposits and profits soared, but it now faces the challenge of holding onto legacy SVB clients in a drastically altered banking landscape.

For years, SVB was the go-to banking partner for around half of US early-stage startups and a significant player in the venture debt market. It hired competitively, headhunters and recruiters said, and had a reputation as a popular place to work with the coffers to attract market-leading talent. Rivals now see a once-in-a-decade chance to make major inroads in the venture debt and startup lending markets.

Rival roundup

HSBC, Stifel and MUFG have swept up partial or whole teams of directors to serve new markets in venture debt and banking. Investment bank Moelis & Co. has hired at least 14 directors and managing directors to lead new units across sectors including application software, fintech and payments, and internet and customer-facing software, according to the company and former employees’ LinkedIn updates.

“These types of teams don’t come up often,” Moelis & Co. CEO Ken Moelis remarked when the topic of hiring from SVB came up in a recent earnings call.

Stifel is also positioning itself to serve as a venture lending hub for entrepreneurs and founders in the ecosystem. It has hired a slew of SVB veterans and declared its plans to extend loans and depository services to seed and Series A startups. Stifel was one of the roughly 20 financial institutions that bid for SVB during the FDIC auction.

JP Morgan, which has pushed for a greater share of the VC market for years, has hired at least seven executives from SVB, especially focused on building out its tech and disruptive commerce banking unit. In 2019, JP Morgan brought on SVB’s former head of VC relationship management Pamela Aldsworth to lead the bank’s VC coverage strategy.

HSBC’s “customer centricity” strategy appealed to David Sabow, former SVB head of technology and healthcare banking, who joined HSBC in April to head up its innovation economy banking practice.

“One of the things that you’re hearing a lot in the current market environment is some institutions touting their size and that they are too big to fail,” Sabow said. “I think if you asked a series of clients, you might find that some of those institutions are almost too big to function in terms of the customer responsiveness and the ability to deliver for companies at all stages.”

First Citizens CEO Frank Holding Jr. acknowledged the attrition in the company’s Q1 earnings call. “Some level of associate turnover in deposit and client churn is expected. However, we are confident that SVB has one of the deepest and most experienced benches of any financial institution serving the innovation economy,” Holding said.

First Citizens President Peter Bristow said the bank will prioritize retaining talent and has allocated additional budget to the SVB arm to keep personnel.

Top talent from SVB bring more than just years of experience. Financial institutions that want to expand their presence in venture debt need to recruit leaders who have a strong reputation and pre-existing connections in the industry.

“Venture lending is heavily relationship-oriented,” said PitchBook analyst Kaidi Gao. And as the banking sector continues to hit turbulence, banks that can bring on bankers who have deep subject-matter expertise have an advantage.

SVB’s rivals now have a rare opportunity to hire talent with deep, existing relationships on Sand Hill Road and in tech hubs across the country.

A different market

Many SVB employees have been exploring their options in case of a potential restructuring or layoffs. But SVB directors who have polished up their resumes are now looking in a market that feels very different from a year or two ago.

“In ’21 and ’22, there was a lot of hiring, especially in venture and technology, and a lot of candidates think we’re still in that market. They’re starting to realize that’s not the case,” said Mary Gay Townsend, managing partner at executive search firm Norgay Partners.

“The senior director, managing director level will need to reset their thinking.” These candidates may need to accept a lateral move in a more challenging market with more talent competing for fewer offers, Townsend added.

A handful of senior SVB executives have ventured further afield, taking jobs outside the bank’s core market. SVB’s former head of global payments Kathleen Pierce-Gilmore has joined Visa as senior vice president of issuer solutions. Former general counsel Michael Zuckert, who spent over nine years at the bank, left in April to work as a consultant for companies in the innovation economy, Law360 reported.

It’s not yet clear how much the First Citizens purchase will affect the highest echelons of SVB leadership. President and CEO Greg Becker, CFO Daniel Beck, and Chief Risk Officer Kim Olson all resigned in the wake of the crisis. Chief HR Officer Laura Cushing also departed the bank, according to her LinkedIn profile, with no announced next steps. But C-Suite executives such as COO Phil Cox and Chief Credit Officer Marc Cadieux are still in place.

SVB has not been an isolated incident of turmoil at a major bank. First Republic was seized and sold in an auction to JP Morgan in early May, and in March, UBS bought a teetering Credit Suisse. If either of those transactions spur layoffs or waves of voluntary departures, the market for bankers will become even more competitive.

In such a buyer’s market, top-level executives “are starting to quietly look around,” said Gilley of recruiter Odgers Berndtson.

Featured image by Drew Sanders/PitchBook News

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