A second, $671 million loan sale follows a federal valuation probe, a CEO's departure and a writedown that has already cut the fund's stock by more than 70% over five years.
BlackRock is pitching a $671 million portfolio of TCP Capital private-credit loans to rival managers, according to people familiar with the matter. It follows an earlier, related sale. On August 4, TCP Capital sold 95% of a $523 million continuation vehicle holding loans to 78 portfolio companies to a fund managed by Pantheon Ventures for approximately $152 million. That sale cut the fund's net leverage from 1.38 times to roughly 0.4 times. It also cost the fund about $57 million in net asset value, a decline of roughly 10.4%.
TCP Capital has framed the sales as accelerating an effort to strengthen its financial position and reshape its portfolio. The context behind that effort is now public. The Manhattan U.S. Attorney's Office opened an investigation into the fund's valuation practices after a series of markdowns earlier this year and questioned TCP Capital executives in May. The fund wrote down $35 million in the first quarter. Its net asset value fell 19% in January alone, tied to restructurings involving e-commerce holdings and the bankruptcy of Renovo Home Partners, and BlackRock cut the fund's value by roughly another 5% in May. Chief executive Phil Tseng is departing, with no successor yet named. Shareholders have filed a class action alleging misleading statements and disclosure failures.
Keefe, Bruyette and Woods upgraded the stock from Underperform to Market Perform after the first loan sale, calling the results "slightly better than expected," though it held its price target at $4.00. TCP Capital shares closed at $4.03 on August 21, giving the fund a market capitalization of roughly $338 million, down more than 70% over the past five years.
None of this establishes that TCP Capital's underlying borrowers are themselves in trouble. The disclosed problems concern how the fund valued its own book and who was running it, not, on the evidence available, the credit quality of what it lent against. But a fund shedding nearly $1.2 billion of loans across two transactions while under federal investigation for how it marked those loans is no longer a story about BlackRock quietly rotating capital toward infrastructure. It is a story about a specific fund working through disclosed problems, with the loan sales as the visible symptom.