BlackRock, Inc.‘s BLK plan to explore the sale of BlackRock TCP Capital Corp.‘s TCPC remaining $671-million loan portfolio looks less like an exit from private credit and more like an effort to clean up a weaker legacy asset. TCPC has been under pressure from credit-quality issues, portfolio markdowns and valuation concerns, making a possible sale an opportunity for BlackRock to reduce risks and improve the overall quality of its private-credit exposure.
This follows TCPC’s recent sale of roughly $523 million of investments across 78 portfolio companies, which helped strengthen its balance sheet and lower leverage. With the board also evaluating options such as returning capital to shareholders, reinvesting proceeds or pursuing a merger, a sale of the remaining portfolio could speed up TCPC’s restructuring. For BLK, this could limit further losses from stressed assets and reduce the distraction created by a vehicle that has weighed on investor confidence.
The move also comes at a time when the private-credit market is facing greater scrutiny. Higher borrowing costs are putting pressure on leveraged borrowers, especially those that raised debt when interest rates were much lower. If rates stay high for longer or corporate earnings weaken, defaults and restructurings across private credit could increase. Against this backdrop, reducing exposure to troubled loans may help BlackRock protect capital and position itself more cautiously as credit conditions become tougher.
Importantly, the TCPC cleanup does not change BlackRock’s long-term growth plans in private markets. The company significantly expanded its private-credit presence through the acquisition of HPS Investment Partners, which was completed in July 2025. HPS was combined with BlackRock’s existing capabilities to form Private Financing Solutions, giving the company greater scale across direct lending, asset-based finance and collateralized loan obligations.
HPS brought $165 billion of client assets under management (AUM) and $118 billion of fee-paying AUM at closing, meaning BlackRock now has a much broader and more diversified private-credit platform than TCPC alone. Therefore, separating weaker legacy assets from this larger franchise could ultimately be beneficial for BLK, allowing management to focus capital and resources on stronger lending opportunities while improving the risk profile of its private-credit business over time.
Private Credit Efforts by BlackRock’s Peers
Per Bloomberg, a key BLK peer, Ares Management ARES is among some of the firms that have been approached for the TCPC loan portfolio. However, like BlackRock, ARES is focusing on limiting exposure to weaker legacy loans while continuing to deploy capital into areas where risk-adjusted returns remain attractive. Ares Management has recently reduced the size of a planned European private-credit continuation vehicle after investors pushed for steeper discounts on the loans being transferred.
Another BLK peer, KKR & Co. KKR continues to view private credit as an attractive long-term opportunity. However, it has highlighted rising defaults and greater dispersion across borrowers, particularly in areas such as software. KKR is increasingly emphasizing diversification into asset-based finance, while stressing stronger underwriting, collateral protection and credit selection.