BlackRock TCP Capital (NASDAQ:TCPC) said its preliminary net asset value (NAV) per share for the fourth quarter of 2025 will be between $7.05 and $7.09 as of December 31, 2025, down from $8.71 at the end of September 2025. The company said issuer-specific developments during the period were the primary drivers of the decline.
The business development company disclosed that six portfolio companies together accounted for about 67% of the NAV decrease, representing roughly $1.11 per share of the decline. Those investments were identified as Edmentum, Razor, SellerX, HomeRenew/Renovo, Hylan, and InMobi.
Alongside the NAV revision, BlackRock TCP Capital reported an increase in the share of debt investments classified as non-accrual. The filing showed non-accrual debt rose to approximately 4.0% of the portfolio at fair value and to roughly 9.6% at cost. By comparison, the previous quarter’s non-accrual rates were about 3.5% at fair value and 7.0% at cost.
The company’s leverage metrics also moved higher. Net regulatory leverage increased to approximately 1.45x from 1.20x in the prior quarter, producing an estimated total debt-to-equity ratio of about 1.74x. Management indicated they expect to reduce leverage over time as they exit positions.
Net investment income for the fourth quarter was preliminarily estimated between $0.24 and $0.26 per share. That figure includes approximately 10.9% of payment-in-kind income.
In response to the quarter’s results, the company’s adviser voluntarily agreed to waive one-third of its base management fee for the fourth quarter of 2025. BlackRock TCP Capital said that waiver provided an approximate $0.02 per share benefit to shareholders.
Market commentators flagged the disclosure as a reminder of evolving credit conditions. UBS analysts wrote: "Even if the NAV decline is idiosyncratic, the disclosure will remind investors that credit normalization is underway, and non accrual rates will rise from today’s below trend levels. Given heightened near-term concerns, we expect alts to underperform broadly, with more acute pressure on those with greater exposure to direct lending."
The company’s filing and the UBS commentary together underline several pressures facing the firm in the quarter: concentrated markdowns in a handful of portfolio companies, a measurable rise in non-accrual loans, and elevated leverage that management says it intends to reduce over time. The adviser fee waiver provides a small offset to the NAV impact but does not alter the disclosed underlying credit and leverage dynamics.
Summary
BlackRock TCP Capital reported a preliminary 19% decline in NAV per share for Q4 2025, driven largely by adverse developments at six portfolio companies. Non-accrual debt levels and leverage rose during the quarter, while a one-third adviser fee waiver delivered a modest per-share benefit.
Key points
- NAV per share estimated at $7.05 to $7.09 as of Dec. 31, 2025, down from $8.71 at Sept. 30, 2025.
- Six portfolio companies - Edmentum, Razor, SellerX, HomeRenew/Renovo, Hylan, and InMobi - accounted for about 67% of the NAV decline, or roughly $1.11 per share.
- Non-accrual debt rose to ~4.0% of the portfolio at fair value and ~9.6% at cost; net regulatory leverage increased to ~1.45x, with total debt-to-equity estimated at ~1.74x.
Risks and uncertainties
- Concentration risk from a small group of portfolio companies - any additional deterioration at those or similar issuers could further pressure NAV. This affects credit-sensitive sectors and alternative credit strategies.
- Rising non-accruals and elevated leverage - higher non-performing loans and increased leverage levels could limit earnings stability and reduce flexibility, impacting fixed-income and lending-focused market segments.
- Short-term performance drag on alternative credit allocations - UBS analysts note that alternatives, especially strategies with larger direct lending exposure, may face near-term underperformance, creating uncertainty for asset managers and investors in private credit.