Federal prosecutors are examining valuation practices at a private credit fund linked to BlackRock, publicly traded business development company BlackRock TCP Capital Corp (TCPC), according to a report by Bloomberg citing unnamed people familiar with the matter.
The Manhattan US Attorney’s Office has in recent months sought information on fund, and executives have reportedly been questioned as part of the inquiry. It is not yet clear whether the probe forms part of a wider investigation into valuation methods across the private credit industry, and no charges have been filed.
BlackRock reportedly declined to comment, while the US Attorney’s Office for the Southern District of New York also reportedly did not respond to requests for comment.
The scrutiny comes amid broader regulatory attention on how private credit assets are valued, a topic previously flagged by officials concerned about potential “mis-marking” of illiquid investments.
TCPC disclosed an unusual off-cycle update in January, warning it expected to reduce the value of its portfolio by about 19%. The announcement triggered a sharp share price drop and was followed by multiple class-action lawsuits from investors alleging misleading disclosures and improper valuation of loan assets.
The fund later reported a net asset value of $7.07 per share for the fourth quarter, down from $8.71 in the previous period. Shares in TCPC have fallen significantly over the year, reflecting wider pressure in the private credit sector as concerns mount over lending standards and borrower stress.
Private credit funds such as TCPC rely heavily on internal valuation models due to the absence of active trading markets for their underlying loans, making periodic “marks” a key driver of reported performance, investor returns and management fees.
BlackRock acquired TCP Capital in 2018, and executives from its HPS Investment Partners business have since taken roles in overseeing the fund’s investment committee following HPS’s integration into the group.
