BLK Stock Drops After DoJ Initiates Probe Into Private Fund Valuations: Report

• Part of the probe has involved bringing in executives for questioning 
• Jay Clayton, Wall Street’s top prosecutor, had raised concerns about private fund valuations in November last year.
• BlackRock TCP Capital’s net asset value per share (NAV/share) is expected to drop to $6.76 at the end of 2026 from $7.07 last year, as per data from Fiscal.ai.

BlackRock (BLK) share price eased 1% after-hours amid media reports that the U.S. Department of Justice (DoJ) is investigating the valuation practices of a BlackRock private credit fund. 

The Manhattan US Attorney’s office in recent months has been seeking information about BlackRock TCP Capital Corp., a publicly traded business development company, Bloomberg reported on Friday.  

The federal probe focuses on how BlackRock TCP Capital (TCPC) values illiquid investments within the fund. Unlike publicly traded securities, which are priced continuously in the market, private credit assets are typically valued using internal models, estimates, and third-party assessments. 

BlackRock acquired TCP from Tennenbaum Capital Partners in 2018. Then, BlackRock TCP Capital Corp. merged with BlackRock Capital Investment and is currently externally managed by its advisor, a wholly-owned, indirect subsidiary of BlackRock, Inc.  

This structure has increasingly drawn scrutiny from regulatory and enforcement bodies concerned with the accuracy of the internal models used to safeguard client interests. 

The Department of Justice’s investigation represents a significant escalatory step in regulatory oversight of the rapidly expanding private markets sector. Regulators have previously raised concerns that asset managers may have incentives to overvalue holdings to boost reported performance metrics and secure higher management fees.

Jay Clayton, who runs the SDNY, said in November last year that he was concerned about how firms value private assets — and that “people should know that the financial regulators and the department are looking at those,” as per Bloomberg.  

BlackRock, which owns the iShares ETF, has not been accused of any wrongdoing, and the existence of an investigation does not guarantee that formal charges or enforcement actions will be brought. Representatives for BlackRock and the Department of Justice both declined to comment on the matter.

BlackRock Q1 Earnings Highlights 

BlackRock reported its financial results for the first quarter ended March 31, 2026, delivering what leadership characterized as one of the strongest opening periods in corporate history. 

The firm reported a diluted earnings per share (EPS) of $14.06 against $9.64 in the same quarter last year. Total net inflows for the quarter reached $130 billion, pushing BlackRock's total assets under management (AUM) to $13.9 trillion, while its total revenue surged by 27%.

BlackRock Retail View 

Retail sentiment was “bearish” with “high” message volumes. 

The stock has gained 1% year-to-date.

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