Private credit funds like TCPC make loans to businesses that are too small or risky for big banks. When those loans go bad, the fund must lower the value of its assets.
TCPC did that twice in 2026. A BlackRock spokesperson said, "Phil Tseng is preparing to leave the fund, though his departure date remains uncertain." Net asset value per share is calculated by subtracting the fund's liabilities from its total assets and then dividing by the number of outstanding shares. From early January 2026 until the end of trading on July 1, 2026, the fund's share price dropped by 39%.
On top of the loan losses, the fund's methods for valuing its holdings are under review by federal prosecutors from the Manhattan US Attorney's office. Valuation is the process of deciding what a loan is worth. If a fund overvalues its loans, it can make the fund look healthier than it really is. That is a serious concern for regulators and investors.
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TCPC operates as a business development company (BDC) with shares listed on a public stock exchange. BDCs are subject to specific regulatory requirements, but the fund's valuation practices are now under intense scrutiny.
BlackRock, the world's largest asset manager, owns TCPC. In 2025, BlackRock paid about $12 billion to buy HPS Investment Partners, a private credit firm. HPS executives now run the day-to-day operations of TCPC.
The presence of HPS gives TCPC a new management team with deep experience in private credit. The private credit market is estimated at $1.8 trillion.
Business development companies are required to maintain an asset coverage ratio of at least 150% and must report net asset values on a regular basis. These rules are designed to protect investors by ensuring funds hold enough assets against their liabilities. The ongoing federal investigation into TCPC's valuation practices raises questions about whether the fund has complied with these standards, potentially eroding investor confidence and leading to stricter oversight.
Tseng's exit clears the way for HPS to take even more control. But the fund still faces the federal investigation and its own loan losses. The transition period remains uncertain, as Tseng has no final departure date.
HPS executives have already taken a larger role in running TCPC. Investors will be watching for any further write-downs or regulatory actions in the months ahead.
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