Private Markets Alert Newsletter

✍️ Op-Ed: The Valuation Reckoning

Private markets face their first major transparency crisis in 2026 as BlackRock TCP Capital disclosed a 19% NAV markdown—from $8.71 to $7.05-$7.09 per share—marking troubled loans including Renovo Home Partners' zero recovery after carrying at par weeks earlier. Family offices embrace co-investment to bypass fees while accessing deal flow, yet private equity underperforms with median funds returning 5.8% annualized versus S&P 500's 11.6% since 2022. Simultaneously, zombie funds proliferate holding 30,000+ companies in aging portfolios. The contradiction: managers expand retail access and perpetual vehicles precisely when institutional skepticism intensifies around valuation practices, exit capabilities, and realized returns. BlackRock executives characterize losses as "issuer-specific" and "idiosyncratic," yet the pattern—First Brands, Tricolor, Brahmbhatt fraud totaling $500M—suggests systemic issues: inadequate monitoring, covenant erosion, and marks disconnected from fundamental deterioration. ICI advocates co-investment flexibility expansion for open-end funds to democratize access, yet retail investors enter an asset class where sophisticated institutions increasingly question whether operational capabilities justify fee structures and illiquidity premiums.

🤝 Top Deals & Market Activity

BlackRock TCP Capital expects Q4 NAV markdown to between $7.05-$7.09 from $8.71 (September 30), reflecting troubled loans in $2 billion middle-market lending fund. Renovo Home Partners filed Chapter 7 bankruptcy in November after BlackRock marked loan at par just weeks earlier—position written to zero. First Brands and Tricolor Holdings filed bankruptcy after being marked near par in September. Brahmbhatt fraud case involved fabricated invoices securing $500M+ in loans from BlackRock's HPS and BNP Paribas for telecom services companies. Family office co-investing accelerates as ultra-wealthy bypass PE fees writing checks alongside sponsors. Cambridge Associates reports some family clients allocate 15-20% of portfolios to co-investments, deploying capital faster than standalone deals or fund commitments. PE management fees hit record low of 1.61% mean rate in 2025 (Preqin data), well below legacy 2% as managers offer discounts amid fundraising difficulty. Private equity investment in asset managers surged as firms seek fee-based revenue streams amid exit drought. US buyout fundraising tracked to substantially underperform—$214B through Q3 2025 versus $360B in 2024.

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