BlackRock reduces private credit fund valuation by 5% in first quarter

Thursday 07 May 2026 - 16:45

Global asset manager BlackRock reported a decline in the valuation of its private credit portfolio, the BlackRock TCP Capital Corp, during the first quarter of 2026, reflecting ongoing pressures in parts of the credit market.

According to its latest financial disclosure, the fund’s net asset value (NAV) per share fell by approximately 5%, reaching $6.72 at fair value. The company said the adjustment was driven by changes in the valuation of several portfolio investments, particularly in the corporate lending segment.

Private credit funds, often structured as business development companies, have come under increased scrutiny from investors in recent months. Market participants are closely reviewing exposure to sectors such as software, which face structural uncertainty due to rapid advances in artificial intelligence and changing business models.

The report also indicated a decline in the fund’s non-accrual rate, which measures loans where borrowers are behind on interest payments. This rate improved to 2.8% in the first quarter, compared with 4% in the previous quarter, suggesting some stabilization in repayment performance.

However, the fund still recorded financial losses during the period, including tens of millions of dollars in realized losses and additional unrealized losses linked to underperforming investments. A significant portion of these losses was associated with loans to companies in the technology sector, including software firms under financial stress.

According to the company, a small number of portfolio holdings were responsible for most of the decline in NAV. Many of the affected investments were originated several years ago, reflecting legacy exposure in older lending vintages.

Financial analysts note that while private credit continues to attract institutional investors, valuation adjustments and sector-specific risks highlight the importance of portfolio diversification and careful credit selection in a rapidly evolving economic environment.