On Wednesday, Bain Capital co-managing Partner John Connaughton told Reuters that SVB Financial Group’s (SIVB.O) bankruptcy would hurt banks that have already cut lending.
As banks respond to the rapid rise in interest rates, private equity companies like Bain have been looking to peers with direct lending arms to acquire finance for transactions, Connaughton said, despite direct lending being much more costly than bank finance.
In a Reuters Newsmaker interview, Connaughton said the banking system could sustain SVB’s demise, but it will increase institutions’ caution.
“Where is Silicon Valley Bank’s obligation and asset matching and what liquidity risks are there?” Connaughton asked.
Bain Capital, founded in 1984 in Boston, manages about $160 billion in private equity, credit, real estate, venture capital, life sciences, cryptocurrency, and blockchain investments.
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