BlackRock private credit fund shows quarterly 5% markdown
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The news: BlackRock has marked down its private credit fund in the March quarter, cutting net asset value per share by a further 5% to USD6.72, down from USD7.07 in the December quarter, and from USD9.18 a year earlier.
BlackRock TCP Capital Corp (TCPC), a USD1.5 billion middle-market lending fund, recorded markdowns of USD35 million, including USD32.7 million in net realised losses and USD2 million in net unrealised losses in the quarter, the latter attributed to loans to Spanish recruiting platform Job and Talent and troubled software firm Pluralsight and others.
According to its filings, the net realised losses came primarily from USD19.1 million, USD11.5 million, and USD4.6 million “in losses from the restructuring of our investments in Alpine, Fishbowl, and Suited Connector, respectively.”
What they said: Loans on which borrowers have stopped making interest payments fell to 2.8% of the portfolio from 4% the prior quarter, with 13 companies in the fund’s portfolio behind on their debt obligations, it said.
The fund’s dividend will remain flat at 17 cents per share after being cut last quarter. The latest decline also follows a 19% NAV drop announced in January, which sent shares tumbling.
The context: BlackRock, the world’s largest asset manager with about USD14 trillion in assets, acquired private credit specialist HPS Investment Partners last year for about USD12 billion as part of an aggressive expansion into private credit.
The sources: BlackRock SEC filing, Blackrock TPC release, Bloomberg
