Business description of BLACKROCK-PRIVATE-CREDIT-FUND from last 10-k form

 

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Part I

In this annual report in Form 10-K, except as otherwise indicated, the terms:

“Fund,” "we," "us" and "our" refer to BlackRock Private Credit Fund., a Delaware statutory trust;

The “Investment Adviser” refers to BlackRock Capital Investment Advisors, LLC, a Delaware limited liability company and the investment manager;

The “Sub-Adviser” refers to BlackRock Advisors, LLC, a Delaware limited liability company and the sub-adviser (and, together with the Investment Adviser, the “Advisers”)

“Administrator” refers to BlackRock Financial Management, Inc, a Delaware corporation, an affiliate of the Investment Adviser and administrator of the Fund.

Summary of Risk Factors

The risk factors described below are a summary of the principal risk factors associated with an investment in us. These are not the only risks we face. You should carefully consider these risk factors, together with the risk factors set forth in Item 1A of this Annual Report on Form 10-K and the other reports and documents filed by us with the Securities and Exchange Commission (“SEC”).

We have limited prior operating history and there is no assurance that we will achieve our investment objective.
Because our investments are generally not in publicly traded securities, there will be uncertainty regarding the value of our investments, which could adversely affect the determination of our net asset value.
Our investments in prospective portfolio companies may be risky, and we could lose all or part of our investment.
We may from time to time enter into credit default swaps or other derivative transactions which expose us to certain risks, including credit risk, market risk, liquidity risk and other risks similar to those associated with the use of leverage.
We may form one or more CLOs, which may subject us to certain structured financing risks.
Debt obligations are subject to credit and interest rate risks which may adversely affect the performance of our investments.
Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.
Market disruptions and other geopolitical or macroeconomic events could create market volatility that negatively impact our business, financial condition and earnings.
Economic recessions or downturns could impart our portfolio companies and harm our operating results.
We are exposed to heightened credit and liquidity risks in the current environment.
The lack of liquidity in certain of our investments may adversely affect our business.
As required by the Investment Company Act of 1940 (the “1940 Act”) , a significant portion of our investment portfolio is and will be recorded at fair value as determined in good faith and, as a result, there is and will be uncertainty as to the value of our portfolio investments.
We are not managed by BlackRock, but rather by one of its subsidiaries and may not replicate the success of that entity or BlackRock.
Changes in interest rates and currency exchange rates may affect our cost of capital and net investment income.
We may invest in credit derivatives that expose us to certain risks, including market risk, liquidity risk and other risks similar to those associated with the use of leverage.
Posting collateral exposes us to additional risks of our counterparties.
We generally will not control our portfolio companies.
Inaccurate projections could adversely affect the performance of our investments.
We may face increasing competition for investment opportunities, which could delay deployment of our capital, reduce returns and result in losses.
Our failure to make follow-in investments in our portfolio companies could impair the value of our portfolio.

 

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General economic conditions could adversely affect the performance of our investments.
We are dependent on information systems and systems failure could significantly disrupt our business, which may, in turn, negatively affect our ability to pay dividends.

Risks Related to the Fund’s Regulation and Operation as a Business Development Company (“BDC”)

The requirement that we invest a sufficient portion of our assets in qualifying assets could preclude us from investing in accordance with our current business strategy; conversely, the failure to invest a sufficient portion of our assets in qualifying assets could result in our failure to maintain our status as a BDC.
Our ability to enter into transactions with our affiliates is restricted.
Our Advisers and their affiliates and employees may have certain conflicts of interest.
When we borrow money, the potential for loss on amounts invested in us will be magnified and may increase the risk of investing in us. Borrowed money may also adversely affect the return on our assets, reduce cash available for distribution to our shareholders and result in losses.
Although we have adopted a share repurchase program, we have discretion to not repurchase your shares, to suspend the program, and to cease repurchases.
The timing of our repurchase offers pursuant to our share repurchase program may be at a time that is disadvantageous to our shareholders.
We may have difficulty sourcing investment opportunities.
Shareholders may experience dilution.
The net asset value of our common shares may fluctuate significantly.

 

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Item 1. Business

BlackRock Private Credit Fund (“BDEBT” or the “Fund”) is a Delaware statutory trust formed on December 23, 2021. The Fund is a non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the 1940 Act. The Fund is externally managed by BlackRock Capital Investment Advisors, LLC (the “Investment Adviser”). BlackRock Advisors, LLC (the “Sub-Adviser” and, together with the Investment Adviser, the “Advisers”) serves as the Fund’s sub-adviser. The Advisers are subsidiaries of BlackRock, Inc. (together with its subsidiaries, including but not limited to the Advisers, “BlackRock”). BlackRock Financial Management, Inc. serves as the administrator of the Fund (the “Administrator”), and is affiliated with the Advisers.

The Fund has elected to be treated for federal income tax purposes, and intends to qualify annually thereafter, as a regulated investment company (“RIC”) as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a RIC, the Fund will not be taxed on its income to the extent that it distributes such income each year and satisfies other applicable income tax requirements.

The Fund’s investment objective is to target high risk-adjusted returns produced primarily from current income generated by investing primarily in directly originated, senior secured corporate debt instruments. The Fund intends to meet its investment strategy by focusing primarily on originating and making loans to, and making debt and equity investments in, U.S. middle market companies, although, the Fund may make investments in portfolio companies that are domiciled outside of the United States, including emerging markets. The Fund will invest in senior secured or unsecured loans, subordinated loans or mezzanine loans and, to a lesser extent, equity and equity-related securities which includes common and preferred stock, securities convertible into common stock, and warrants. BDEBT defines “middle market companies” to generally mean companies with earnings before interest expense, income tax expense, depreciation and amortization, or “EBITDA”, between $10 million and $250 million annually and/or annual revenue of $50 million to $2.5 billion at the time of investment. The Fund may on occasion invest in smaller or larger companies if an attractive opportunity presents itself.

The Fund commenced operations on March 18, 2022.

Investment Strategy

The Investment Adviser has a deep and experienced investment team, organized across 19 industry-focused verticals, that is among the most tenured in the direct lending market, having invested in the strategy across multiple market cycles for more than 20 years. This depth of experience enables the team to not only identify unique and less competitive investments, but also to structure customized downside protection and better target outsized risk-adjusted returns.

The Fund expects to benefit from BlackRock’s broad and established sourcing network to seek attractive investment opportunities across all market environments. BlackRock is one of the largest corporate lenders in the world and a long-tenured participant in the private debt markets. As such, it has diversified sourcing channels and maintains an active dialogue with industry and sector contacts, banks, brokers, sponsors, secondary desks, client relationships, other credit-focused investment managers and its well-established network of industry experts and executive-level operating professionals – all of which help to produce attractive deal flow.