- BlackRock must write down roughly $150 million after Renovo Home Partners’ sudden bankruptcy turned its private-debt position from par to zero.
- The collapse spotlights private credit’s valuation opacity and risks, undermining confidence in quarterly, subjective marks for illiquid loans.
Just when you thought private credit was the unbreakable darling of Wall Street, BlackRock Inc. delivers a gut punch that has everyone talking.
Picture this: A month ago, the world’s largest asset manager was confidently valuing its private debt in a Dallas-based home remodeler at full price – 100 cents on the dollar.
Fast forward to last week, and poof – it’s worth absolutely nothing. Zero. Nada.
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We’re talking about Renovo Home Partners, a company pieced together in 2022 by private equity firm Audax Group as a roll-up of local kitchen and bathroom remodeling outfits.
Renovo didn’t just stumble – it crashed headfirst into bankruptcy, filing last week with plans for a full shutdown and liquidation.
BlackRock wasn’t flying solo here. They held the lion’s share of Renovo’s roughly $150 million in private debt, with smaller slices going to Apollo Global Management’s MidCap Financial and Oaktree Capital Management.
Spokespeople for BlackRock, Apollo, and Oaktree all declined to comment beyond the basics when pressed.
This isn’t some obscure blip on the radar. It’s the kind of sudden nosedive that exposes the raw underbelly of the $1.7 trillion private credit industry – a sector that’s exploded as banks pull back and investors chase juicy yields in illiquid loans.
How Did This Happen? The Slow Burn to Bankruptcy
Renovo’s troubles were hardly a secret. Back in April, lenders – including BlackRock – agreed to swallow losses and swap some debt for equity in a desperate recapitalization bid to keep the company afloat.
They even allowed “payment-in-kind” interest deferrals through the third quarter, basically kicking the can down the road.
Yet, as late as September, funds tied to BlackRock and Apollo were still marking this debt at par value in regulatory filings – signaling to investors that full repayment was basically a sure thing.
Then, boom. Early in the fourth quarter, Renovo’s board threw in the towel.
As Philip Tseng, CEO of BlackRock TCP Capital Corp., put it bluntly on an earnings call: “Early in the fourth quarter, company-specific performance and liquidity issues led the Renovo board to determine that the best available path forward was a liquidation process.
We expect to fully write down this position in the fourth quarter of 2025.”
That’s verbatim from Tseng – no sugarcoating. And BlackRock isn’t mincing words internally either. They’re gearing up for a complete write-down.
The Bigger Picture: Why This Hits Private Credit Where It Hurts
Sure, $150 million is pocket change for giants like BlackRock (managing over $10 trillion). But this fiasco is fueling a fiery debate that’s been simmering all year: How reliable are these “marks” on private loans
Private credit valuations aren’t like stocks or bonds – no daily ticker tape.
They’re updated quarterly, often with a heavy dose of subjectivity.
Critics argue this creates a dangerous illusion of stability, masking cracks until it’s too late. As one observer snarked on ZeroHedge, it’s like marking a turd to shine right up until the whole thing collapses.
This isn’t BlackRock’s first rodeo with private credit headaches. Just last month, they were tangled in loans to telecom firms accused of straight-up fraud, faking receivables to dupe lenders.
And earlier, right after snapping up HPS Investment Partners for $12 billion, they zeroed out another bad bet backed by phony telecom invoices.
JPMorgan’s Jamie Dimon has been sounding alarms, warning that private credit blowups could reveal “cockroaches” lurking in the shadows.
BlackRock’s Larry Fink? He’s doubling down, calling himself “more excited” than ever about the space.
What’s Next for Investors and the Market?
For all the doom, private credit isn’t going anywhere. BlackRock’s own forecasts paint Europe’s market doubling by 2030, hitting over €800 billion ($846 billion USD).
But incidents like Renovo are a stark reminder: Dispersion is king.
Not every loan is a winner, and when one tanks this hard, this fast, it forces everyone to question the opacity.
As one industry insider put it, this “strikes at the heart of what critics see as a major vulnerability in the private credit market: the disconnect between the valuation of illiquid loans and the performance of the underlying companies.”
If you’re parked in private credit funds, this might be the moment to dig deeper into those quarterly reports.
Because in a world where a loan can go from hero to zero overnight, transparency – or the lack of it – could be the real risk.
Also Read: UBS is Now Liquidating Funds to Cover Whopping $500m Exposure
