Yeah, more the latter. VCFundX goes out and raises capital for a new fund, which includes PensionFundFoo as one of the LPs, and once closed, goes to SVB and says, 'hey look we have $100M in signed LP commitments for this fund we just closed' and SVB says 'great - we'll set up a line of credit for you at [x]% of that $100M that you can draw down now (or later) to do with what you want' (obviously to invest in startups, but that would also include their management fees which GPs can pull forward and use to fund their lifestyles and/or invest). And then the future capital calls from LPs, including PensionFundFoo, go to SVB to pay down any amount of that loan outstanding.

The majority of VCs use this product simply to help smooth working capital needs and to be able to make new investments without needing to call capital sooner than LPs would prefer (also to juice IRRs), but there's almost certainly some minority that have basically taken an advance on their entire fund size, or at least a large portion of it. And now any of that cash still held at SVB is obviously at risk.