BlackRock TCP Capital Corp. SEC 10-Q Report
BlackRock TCP Capital Corp., a business development company focused on providing financing solutions to middle-market companies, has released its Form 10-Q report for the second quarter ended June 30, 2025. The report provides a comprehensive overview of the company's financial performance and operational highlights, reflecting the company's strategic initiatives and market conditions.
Financial Highlights
Investment Income: The company reported an investment income of $51.5 million for the three months ended June 30, 2025. This represents a decrease attributed to a smaller portfolio size and lower interest income from reduced SOFR rates.
Net Investment Income: Net investment income stood at $27.6 million for the same period, primarily due to decreased total investment income and reduced expenses.
Net Realized Gain (Loss): The company experienced a net realized loss of $(66.3) million, mainly from losses in restructuring investments in SellerX, Khoros, InMoment, and Renovo.
Net Change in Unrealized Appreciation (Depreciation): There was a net change in unrealized appreciation of $22.8 million, driven by reversals of previously recognized unrealized losses from restructuring investments.
Net Increase (Decrease) in Net Assets Resulting from Operations: The company reported a net decrease in net assets resulting from operations of $(15.9) million, due to lower net realized and unrealized losses, partially offset by lower net investment income.
Business Highlights
Investment Strategy: BlackRock TCP Capital Corp. focuses on achieving high total returns through current income and capital appreciation, with an emphasis on principal protection. The company's investments are primarily in the debt of middle-market companies and small businesses, including senior secured loans, junior loans, mezzanine debt, and bonds.
Portfolio Composition: As of June 30, 2025, the investment portfolio consisted of 153 portfolio companies, with 89.4% invested in debt investments, primarily senior secured debt. The portfolio was diversified across various industries, with significant allocations in Internet Software and Services (13.6%), Software (13.0%), and Diversified Financial Services (11.7%).
Regulatory Compliance: The company is required to invest at least 70% of its total assets in qualifying assets, which include securities and indebtedness of private U.S. companies and certain public companies. As of June 30, 2025, 83.4% of total assets were invested in qualifying assets.
Leverage Program: The company's leverage program includes various credit facilities and notes, with a total capacity of $1,636.3 million. The program is designed to support investment activities and is subject to compliance with regulatory and covenant requirements.
Merger Activity: On March 18, 2024, the company completed a merger with BlackRock Capital Investment Corporation (BCIC), resulting in the issuance of 27,823,870 shares of common stock to former BCIC shareholders. The merger was considered a tax-free reorganization.
Valuation Process: The company values its portfolio investments at fair value, using a combination of market quotations and independent appraisals. As of June 30, 2025, 99.0% of investments were categorized as Level 3, indicating reliance on significant unobservable inputs.
Revenue Generation: The company generates revenue primarily from interest on debt holdings, dividends on equity interests, and capital gains from investment dispositions. The weighted average effective yield of the debt portfolio was 12.0% as of June 30, 2025.
Future Outlook: BlackRock TCP Capital Corp. anticipates continued investment activity, supported by its leverage program and regulatory compliance. The focus remains on identifying suitable investment opportunities and managing the existing portfolio to achieve desired returns.
SEC Filing: BlackRock TCP Capital Corp. [ TCPC ] - 10-Q - Aug. 07, 2025