Regulators Target Private Credit Valuations: BlackRock TCP Restructures and ASIC Warns of "First Significant Cracks"
The private credit secondary market has emerged as a brutal real-world "market test" for unlisted loan valuations, forcing major managers to either scale back transactions or accept painful write-downs. This market reality, coupled with intensifying regulatory scrutiny, is driving major structural changes and executive shakeups at the industry's highest levels.
BlackRock TCP Capital's $523 Million Restructuring and CEO Exit
Following a tumultuous period of markdowns and government scrutiny of its valuation practices—including a U.S. Department of Justice (DOJ) investigation—BlackRock TCP Capital Corp. (NASDAQ: TCPC) executed a massive portfolio restructuring. On August 4, 2026, TCPC entered into a definitive agreement to sell 95% of its equity interest in a Continuation Vehicle holding approximately $523 million of private credit loans to funds managed by Pantheon, a leader in private credit secondaries.
The transaction represented approximately 48% of the fair market value of TCPC's entire debt portfolio. To execute the sale, BlackRock was forced to accept a steep valuation discount, resulting in a 10.4% Net Asset Value (NAV) write-down (equivalent to a loss of $0.68 per share based on its June 30, 2026, NAV). Following the transaction, TCPC's Board engaged investment bank Keefe, Bruyette & Woods (KBW) to support a comprehensive strategic review of the fund's remaining assets.
In the wake of this massive portfolio liquidation, Phil Tseng, Chairman, CEO, and Co-CIO of BlackRock TCP Capital Corp., resigned on August 31, 2026, effective October 1. Jason Mehring was named the new CEO, and Dan Worrell was appointed president.
ASIC Warns of "First Significant Cracks" in Australian Private Debt
In Australia, the Australian Securities and Investments Commission (ASIC) has dramatically escalated its enforcement focus on private credit. On August 26, 2026, ASIC Deputy Chair Sarah Court warned that the sector is facing its "first real test" as major corporate borrowers collapse and retail-facing funds run up against liquidity constraints.
Court stated:
"It is early days, and no doubt more and more information will come out in the weeks and months to come, but, unfortunately, what we're seeing is in Australia the first significant cracks... We've called out before that private credit is important for all Australians because of the involvement of people's superannuation funds. This is not some peripheral issue over to one side. This really matters, and that is why we've been talking about it for such a long time."
The warning follows the high-profile collapse of major property developer Bathla Group (Universal Property Group had $3.2 billion in liabilities, the majority owed to private credit funds) and the bankruptcy of hospitality mogul Jon Adgemis (who amassed $1.8 billion in debt, much of it from private credit firms).
Furthermore, an increasing number of Australian non-bank lenders—including Merricks, Longreach, and Centuria Bass—have restricted investor redemptions. In late August, MA Financial announced a temporary redemption limit of up to 1% of its funds under management per month to manage liquidity.
Additionally, ASIC is extending its regulatory scrutiny beyond valuations. Following findings of widespread interest rate overcharging in the banking sector (via offset accounts), ASIC Chair Sarah Court signaled that the regulator is investigating whether non-bank private credit lenders are also miscalculating interest rates for borrowers.