Alternative Asset Managers Need Another Silicon Valley Bank Longer Term

A concern we'll address on the heels of our previous note on the alternative asset managers—narrow-moat Blackstone, KKR & Company, and Carlyle Group—is that while the industry may have dodged a bullet as regulators have moved to tap the Deposit Insurance Fund to backstop deposits held in the collapsed Silicon Valley Bank, we will need to see another institution step in to fill the void left by SVB for the ecosystem that has allowed investments in startups and early-stage technology firms to be so lucrative for the alternative asset managers in the past to continue to do so in the future. For the time being, we are leaving our Uncertainty Ratings for the alternative asset managers at High on the belief that we will eventually see some entity step in and take SVB's place.