May 2 (Reuters) - Collapsed U.S. lender SVB Financial

Group ( SIVBQ ) said on Thursday that an entity affiliated with Pinegrove

Capital Partners will acquire its venture capital business, SVB

Capital.

A newly-created entity, backed by permanent capital from

Brookfield and Sequoia Heritage, will buy SVB Capital

for a combination of cash and other economic considerations, SVB

Financial ( SIVBQ ) said. It did not disclose a financial value.

SVB Financial ( SIVBQ ) is seeking approval from a bankruptcy court

and has requested a hearing on June 5.

SVB Capital manages about $10 billion in investments on

behalf of about 750 limited partner investors, such as public

pensions, that have contributed capital to the investment fund,

according to court documents. SVB Financial ( SIVBQ ) continues to fight

U.S. regulators' seizure of nearly $2 billion in cash.

"We believe the agreement maximizes the value for the

benefit of SVB Financial Group's ( SIVBQ ) constituents, with a

significant cash component as well as the ability to participate

in the future upside potential of the business," Bill Kosturos,

chief restructuring officer of SVB Financial Group ( SIVBQ ) said.

In January, SVB Financial ( SIVBQ ) had said it planned to turn over

its remaining venture capital business to a new, creditor-backed

company. The coalition backing the deal, which includes MFN

Partners, Pacific Investment Management Company, Bank of America

Securities, JP Morgan Securities, and King Street Capital, hold

about 48% of SVB Financial's ( SIVBQ ) most-senior debt.

As part of the agreement, Pinegrove and SVB Capital will

operate independently, each led by their existing management

teams, with common long-term financial backing of Brookfield and

Sequoia Heritage.

The transaction is also supported by SVB Financial's ( SIVBQ ) key

creditor groups and is subject to regulatory approval and other

customary closing conditions, the firm said.

SVB Financial ( SIVBQ ) filed for bankruptcy last year after Silicon

Valley Bank collapsed.

SVB Securities and SVB Capital's funds and general partner

entities were not included in the Chapter 11 filing, the company

had said last year.

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by

Savio D'Souza and Mrigank Dhaniwala)