Phil Tseng is leaving his position as chief executive officer of BlackRock TCP Capital Corp., marking a major leadership change at a private-credit business that has been under pressure from loan losses, falling asset values and scrutiny over its valuation practices. The departure comes during a difficult period for the fund and highlights the broader challenges facing the rapidly expanding private-credit industry.
Tseng’s exit is significant because of his long association with TCP Capital. Before joining BlackRock, he was a managing partner at Tennenbaum Capital Partners, the private-credit firm that BlackRock acquired in 2018. He subsequently became a senior figure within BlackRock’s private-capital operations and helped oversee TCP Capital, a publicly traded business development company focused on lending to middle-market businesses.
His departure follows a turbulent year for BlackRock TCP Capital. The fund suffered a major decline in net asset value earlier in 2026, with NAV falling by about 19% in January. A further decline of roughly 5% was reported in May, increasing pressure on the portfolio and raising questions about the quality and valuation of some of its investments.
The problems are closely connected to the risks inherent in private credit. Business development companies such as TCP Capital lend directly to companies, often providing financing to businesses that may not have easy access to traditional bank lending or public bond markets. Investors are attracted by the higher yields generated from these loans, but those returns come with greater exposure to borrowers whose financial conditions can deteriorate quickly.
TCP Capital has experienced precisely that problem. Several borrowers in its portfolio have suffered financial difficulties, forcing the fund to reduce the value of its investments. One particularly damaging case involved Renovo Home Partners, whose debt was subsequently written down sharply after the company entered bankruptcy proceedings. The deterioration of such investments contributed to the fund’s substantial reduction in NAV.
The scale of the markdowns has made valuation an especially sensitive issue. Unlike publicly traded bonds and stocks, many private-credit loans do not have continuously available market prices. Asset managers therefore have to estimate the fair value of loans using financial models, borrower performance and other market information. When a loan deteriorates, determining the appropriate valuation can become complicated.
US authorities have been examining BlackRock executives and the fund’s loan-valuation practices, according to reports. The scrutiny adds another layer of pressure to a business already dealing with portfolio losses and investor concerns. The existence of an investigation does not establish wrongdoing, but it demonstrates how closely private-credit valuation practices are being watched as the industry expands.
Tseng’s departure therefore comes at a particularly sensitive moment. BlackRock has appointed Jason Mehring as his successor at TCP Capital. Tseng has also resigned from the BlackRock Private Credit Fund and BlackRock Direct Lending Corp., according to reports.
The leadership transition will put the spotlight on Mehring and BlackRock’s strategy for dealing with the fund’s problems. The immediate priority is likely to be stabilizing the portfolio and protecting the balance sheet rather than aggressively expanding lending.
TCP Capital has already taken steps in that direction. The fund has reduced leverage and pursued transactions designed to strengthen its financial position. A portfolio sale involving Pantheon-managed funds was expected to significantly reduce leverage, while non-accrual investments also improved from previous levels. These measures suggest that management has been trying to shrink risk and create a more conservative balance sheet.
However, reducing risk can come with another cost: lower income and potentially smaller distributions to shareholders. TCP Capital has already reduced its dividend, with the quarterly distribution falling substantially from earlier levels. For investors who bought the stock because of its high income, this is an important change in the investment case.
The difficulties at TCP Capital also arrive as the private-credit industry faces a broader test. Private lending expanded rapidly during the period when banks became more cautious about lending to certain businesses. Large asset managers responded by building increasingly large private-credit platforms, attracted by the prospect of strong fee income and higher returns.
The weakness of this model becomes more visible when economic conditions deteriorate. If borrowers struggle, private-credit managers can face rising defaults and declining loan values. Unlike a diversified portfolio of highly liquid securities, a private-credit portfolio may contain loans that are difficult to sell quickly without accepting a significant discount.
This creates a difficult balancing act for managers. Holding troubled loans may preserve the possibility of recovery, but it also leaves capital tied up in weak investments. Selling them can reduce leverage and clean up the portfolio, but it may force the fund to recognize losses.
TCP Capital has increasingly moved toward the second approach. The fund’s portfolio sale and balance-sheet measures indicate an effort to reduce exposure and strengthen its financial position.
For BlackRock, the situation is also important because private credit has become a major part of its broader growth strategy. The firm has expanded significantly in private markets, seeking to compete with other major asset managers in lending, private equity and alternative investments. The difficulties at TCP Capital demonstrate the risks that accompany that expansion.
The central challenge for the new leadership will be rebuilding confidence while demonstrating that the remaining portfolio can produce sustainable returns without exposing investors to excessive credit risk. That will require careful management of troubled borrowers, realistic asset valuations and disciplined lending standards.
Investors will also be watching whether the fund’s strategic direction changes following Tseng’s departure. BlackRock could continue shrinking the portfolio and emphasizing higher-quality loans, or it could pursue a broader restructuring of the business. Either way, the new leadership inherits a fund that needs to prove that its investment model can withstand the losses that have already emerged.
Tseng’s departure should therefore not be viewed simply as an executive change. It is another indication of how seriously the problems at TCP Capital have developed. The fund has already experienced significant NAV declines, dividend reductions and portfolio adjustments, while valuation practices have attracted regulatory scrutiny.
The bigger question now is whether BlackRock can turn those setbacks into a controlled restructuring rather than allowing them to become a prolonged deterioration.
Private credit remains an important part of global finance, and problems at one fund do not necessarily indicate a crisis across the entire industry. But TCP Capital’s experience provides a warning about what can happen when aggressive lending meets weaker borrowers and uncertain valuations.
For BlackRock, the priority is no longer simply growing its private-credit business. It must demonstrate that it can manage difficult credit cycles, accurately value illiquid assets and protect investors when borrowers fail.
With Phil Tseng leaving and Jason Mehring taking over, TCP Capital enters a new phase. The leadership change gives BlackRock an opportunity to reset the business, but the fund’s underlying credit problems will not disappear with a change at the top. The real test will be whether the new management can stabilize the portfolio, restore investor confidence and prove that TCP Capital can generate durable returns without taking risks that its balance sheet cannot absorb.
