BlackRock private credit fund CEO exits amid TCPC overhaul

Phil Tseng, the chief executive of BlackRock's private credit vehicle, TCPC, is resigning amid a challenging period for the firm. The company has been grappling with substantial loan markdowns, scrutiny over its valuation methods, and a major restructuring of its investment portfolio, as reported by Bloomberg. According to a regulatory filing, Tseng resigned as CEO on August 31st and will depart BlackRock on October 1st.

Jason Mehring, a BlackRock executive involved with the fund, has been appointed as the new CEO, while Dan Worrell will assume the role of president.

These changes come after TCPC announced a major overhaul of its portfolio last month, agreeing to sell $523 million of loans to a vehicle backed by secondaries investor Pantheon. The fund has also engaged Keefe, Bruyette & Woods to explore options for an additional $671 million of assets. TCPC has faced mounting pressure due to significant reductions in the value of its private loan portfolio. The fund's net asset value dropped by 19% in January and another 5% in May as several investments faced stress.

The difficulties TCPC has encountered have attracted attention from US authorities, with the Manhattan US Attorney's Office seeking information about the company's valuation practices. The challenges TCPC faces occur as BlackRock pushes forward with its aggressive expansion into private markets. Despite constituting a small portion of BlackRock's $15.3 trillion in assets, TCPC has been a strategic focus since BlackRock's 2018 acquisition of middle-market private credit specialist Tennenbaum Capital Partners.

BlackRock has been aggressively increasing its ambitions in private credit, further solidifying its position in one of the fastest-growing areas of alternative investment with its $12 billion acquisition of HPS Investment Partners in the previous year. Tseng's departure follows reports in July suggesting he had been preparing to leave the firm.