Blackstone’s SVB Deal That Got Away Shows PE Sidelined in Crisis

Silicon Valley Bank had just collapsed and Blackstone Inc.’s dealmakers saw an opportunity. One problem: The firm didn’t want to look like a vulture.

In a deal that ultimately didn’t go through, the world’s largest alternative asset manager agreed to provide financial support for Valley National Bancorp’s bid for SVB in March. Rather than vying for SVB assets outright, Blackstone backed a regional bank — the type of buyer favored by watchdogs.

The partnership, which hasn’t been reported before, followed a debate among senior Blackstone executives who fretted over public perceptions and regulatory burdens, according to people with ...