TPG Twin Brook's Net Assets Surge on Strong Investment Income

TL;DR

**TPG Twin Brook is crushing it with investment income, signaling a strong run in their senior secured debt plays.**

AI Summary

TPG Twin Brook Capital Income Fund reported a net increase in net assets from operations of $92.714 million for the six months ended June 30, 2025, a significant rise from $58.958 million in the same period of 2024. Total investment income for the six months ended June 30, 2025, reached $184.808 million, up from $112.481 million in 2024. Net investment income after taxes also increased to $88.899 million from $58.639 million year-over-year. The fund's total assets grew to $3,788.416 million as of June 30, 2025, from $3,366.488 million at December 31, 2024, primarily driven by an increase in investments at fair value to $3,512.536 million from $3,080.569 million. Total liabilities also increased to $1,873.761 million from $1,825.256 million. The net asset value per share remained stable at $25.31 as of June 30, 2025, compared to $25.30 at December 31, 2024. The fund experienced a net cash outflow from operating activities of $351.080 million for the six months ended June 30, 2025, compared to an outflow of $879.951 million in the prior year, while net cash provided by financing activities was $326.214 million, down from $995.755 million. The fund continues to invest heavily in non-controlled/non-affiliated senior secured debt across various sectors, with significant holdings in Aerospace and Defense, Auto Components, and Chemicals.

Why It Matters

This filing indicates robust growth in TPG Twin Brook Capital Income Fund's investment income and net assets, suggesting a healthy performance in its senior secured debt portfolio. For investors, the stable Net Asset Value per share at $25.31, despite significant asset growth, points to consistent valuation and potentially attractive returns from income. The fund's continued deployment of capital into diverse sectors like Aerospace and Defense and Auto Components highlights its strategy to capitalize on specific market opportunities, potentially impacting the competitive landscape for middle-market lending. Employees and customers of the underlying portfolio companies benefit from continued access to capital, fostering growth and stability in their respective industries.

Risk Assessment

Risk Level: medium — The fund's risk level is medium due to its significant exposure to senior secured debt, which inherently carries credit risk, and the increase in total liabilities to $1,873.761 million from $1,825.256 million. While senior secured debt is generally lower risk, the substantial volume of investments, with amortized cost of non-controlled/non-affiliated investments at $3,518,654 million, means any widespread economic downturn could impact portfolio company performance and loan repayments.

Analyst Insight

Investors should consider TPG Twin Brook Capital Income Fund for its consistent income generation and stable NAV, but remain aware of the inherent credit risks associated with its senior secured debt portfolio. Monitor future filings for changes in interest rates and economic conditions that could impact the fund's underlying investments and overall performance.

Financial Highlights

debt To Equity

0.98

revenue

$184.808M

operating Margin

48.1%

total Assets

$3,788.416M

total Debt

$1,804.922M

net Income

$92.714M

eps

$25.31

gross Margin

N/A

cash Position

$136.198M

revenue Growth

+64.3%

Revenue Breakdown

Key Numbers

• $92.714M — Net increase in net assets from operations (Increased from $58.958 million for the six months ended June 30, 2024)
• $184.808M — Total investment income (Increased from $112.481 million for the six months ended June 30, 2024)
• $88.899M — Net investment income after taxes (Increased from $58.639 million for the six months ended June 30, 2024)
• $3,788.416M — Total assets (Increased from $3,366.488 million at December 31, 2024)
• $3,512.536M — Investments at fair value (Increased from $3,080.569 million at December 31, 2024)
• $1,873.761M — Total liabilities (Increased from $1,825.256 million at December 31, 2024)
• $25.31 — Net asset value per share (Stable compared to $25.30 at December 31, 2024)
• $351.080M — Net cash used in operating activities (Decreased from $879.951 million for the six months ended June 30, 2024)
• $326.214M — Net cash provided by financing activities (Decreased from $995.755 million for the six months ended June 30, 2024)
• 75,654,705 — Common shares issued and outstanding (Increased from 60,925,719 shares at December 31, 2024)

Key Players & Entities

• TPG Twin Brook Capital Income Fund (company) — Registrant
• Securities and Exchange Commission (regulator) — Filing oversight
• Twin Brook Equity XVIII Corp. (company) — Wholly-owned, consolidated subsidiary
• Twin Brook Equity XXXIII Corp. (company) — Wholly-owned, consolidated subsidiary
• AlphaCoin LLC (company) — Non-controlled/non-affiliated senior secured debt investment
• Mattco Forge, Inc (company) — Non-controlled/non-affiliated senior secured debt investment
• Third Holdco, LLC (company) — Non-controlled/non-affiliated senior secured debt investment
• Load One Purchaser Corporation (company) — Non-controlled/non-affiliated senior secured debt investment
• A.P.A. Industries, LLC (company) — Non-controlled/non-affiliated senior secured debt investment
• Bloomberg (company) — Publisher of analysis

FAQ

Risk Factors

• Interest Rate Sensitivity [medium — financial]: The fund's investments are primarily in floating-rate senior secured debt. Changes in interest rates can impact the fair value of these investments and the fund's net investment income. For the six months ended June 30, 2025, the fund's total investment income increased to $184.808 million from $112.481 million in the prior year, suggesting a favorable interest rate environment or portfolio growth.
• Credit Risk of Borrowers [high — market]: The fund is exposed to the creditworthiness of its borrowers. A deterioration in the financial condition of these borrowers could lead to defaults and impact the fund's investment income and asset values. The fund's investments are concentrated in sectors like Aerospace and Defense, Auto Components, and Chemicals.
• Reliance on Investment Manager [medium — operational]: The fund's performance is heavily dependent on the expertise and strategies of TPG Twin Brook Capital. Any changes in management or strategy could adversely affect the fund's operations and investment returns.
• Regulatory Changes [low — regulatory]: As a registered investment company, the fund is subject to various regulatory requirements. Changes in regulations could impact the fund's operations, fees, and investment strategies.

Industry Context

The fund operates within the direct lending and private credit market, focusing on senior secured debt. This sector is characterized by its reliance on interest rate movements and the credit quality of corporate borrowers. The competitive landscape includes other BDCs and private debt funds, with a trend towards increasing deal sizes and complexity.

Regulatory Implications

As a Business Development Company (BDC), TPG Twin Brook Capital Income Fund is subject to regulations under the Investment Company Act of 1940. Compliance with leverage limits, asset coverage requirements, and disclosure obligations is crucial. Recent regulatory focus on private fund disclosures and fees could also impact operations.

What Investors Should Do

1. Monitor portfolio diversification and credit quality.
2. Analyze the impact of interest rate changes on net investment income and NAV.
3. Evaluate the growth in assets under management and its drivers.
4. Review management fees and incentive fee structures.

Key Dates

• 2025-06-30: Six Months Ended — Reported a net increase in net assets of $92.714 million and total investment income of $184.808 million, indicating strong operational performance.
• 2024-06-30: Six Months Ended — Prior period comparison showing a net increase in net assets of $58.958 million and total investment income of $112.481 million.
• 2025-06-30: As of — Total assets reached $3,788.416 million, with investments at fair value at $3,512.536 million, reflecting portfolio growth.
• 2024-12-31: As of — Previous period's total assets were $3,366.488 million, with investments at fair value at $3,080.569 million.

Glossary

Non-controlled/non-affiliated investments

Investments in companies where the fund does not have significant influence or control, and is not affiliated with the investee. (Represents the largest portion of the fund's assets ($3,512.536 million as of June 30, 2025), indicating the core investment strategy.)

Amortized cost

The initial cost of a financial instrument, adjusted over time for amortization of premium or accretion of discount, and for impairment losses. (Provides context for the fair value of investments, showing a slight premium ($3,518.654 million vs $3,512.536 million) for non-controlled/non-affiliated investments.)

Net asset value per share (NAV)

The market value of a fund's assets minus its liabilities, divided by the number of outstanding shares. (Remained stable at $25.31 as of June 30, 2025, indicating consistent valuation despite portfolio growth.)

Income incentive fee payable

An amount owed to the investment manager based on a percentage of the fund's investment income. (Increased to $6.718 million from $5.465 million, reflecting higher investment income.)

Capital gains incentive fee payable

An amount owed to the investment manager based on a percentage of realized capital gains. (Appeared as $277 thousand as of June 30, 2025, indicating some realized capital gains during the period.)

Year-Over-Year Comparison

TPG Twin Brook Capital Income Fund demonstrated robust growth in the first six months of 2025 compared to the same period in 2024. Total investment income surged by 64.3% to $184.808 million, leading to a 58.1% increase in net increase in net assets from operations to $92.714 million. Total assets expanded by approximately 12.5% to $3,788.416 million, primarily due to a rise in investments. While liabilities also increased, the net asset value per share remained stable, indicating effective management of growth and capital. Operating cash outflows decreased significantly, and financing activities provided substantial capital, though less than the prior year.

Key Financial Figures

• $0.001 — ) of the Act: Common Shares, par value $0.001 per share Indicate by check mark wheth

Filing Documents

• tcap-20250630.htm (10-Q) — 10641KB
• exhibit311q1251.htm (EX-31.1) — 9KB
• exhibit312q1251.htm (EX-31.2) — 9KB
• exhibit321q1251.htm (EX-32.1) — 4KB
• exhibit322q1251.htm (EX-32.2) — 4KB
• 0001913724-25-000072.txt ( ) — 32795KB
• tcap-20250630.xsd (EX-101.SCH) — 70KB
• tcap-20250630_cal.xml (EX-101.CAL) — 92KB
• tcap-20250630_def.xml (EX-101.DEF) — 550KB
• tcap-20250630_lab.xml (EX-101.LAB) — 764KB
• tcap-20250630_pre.xml (EX-101.PRE) — 627KB
• tcap-20250630_htm.xml (XML) — 7521KB

Financial Statements

Financial Statements 2 Consolidated Statements of Assets and Liabilities as of June 30, 2025 (Unaudited) and December 31, 2024 2 Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) 4 Consolidated Statements of Changes in Net Assets for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited) 6 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited) 7 Consolidated Schedules of Investments as of June 30, 2025 (Unaudited) and December 31, 2024 9

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 66 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 108 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 129 Item 4.

Controls and Procedures

Controls and Procedures 130 PART II OTHER INFORMATION 131 Item 1.

Legal Proceedings

Legal Proceedings 131 Item 1A.

Risk Factors

Risk Factors 131 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 131 Item 3. Defaults Upon Senior Securities 131 Item 4. Mine Safety Disclosures 131 Item 5. Other Information 131 Item 6. Exhibits 132

Signatures

Signatures 133 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS TPG Twin Brook Capital Income Fund Consolidated Statements of Assets and Liabilities (Amounts in thousands, except share and per share amounts) June 30, 2025 December 31, 2024 (Unaudited) Assets Investments at fair value: Non-controlled/non-affiliated investments at fair value (amortized cost of $ 3,518,654 and $ 3,084,619 , respectively) $ 3,512,536 $ 3,080,569 Non-controlled/affiliated investments at fair value (amortized cost of $ 80,957 and $ 74,552 , respectively) 91,868 80,654 Cash and cash equivalents (restricted cash of $ 62,564 and $ 71,863 , respectively) 136,198 161,064 Deferred financing costs 26,190 27,997 Interest receivable 14,979 12,479 Unrealized gain on derivative contracts 4,630 1,021 Deferred offering costs 818 1,035 Prepaid expenses 504 1,057 Other assets 693 612 Total assets $ 3,788,416 $ 3,366,488 Liabilities Debt (Note 5) 1,804,922 1,745,999 Interest payable 28,385 33,546 Dividend payable 16,550 14,602 Income incentive fee payable 6,718 5,465 Capital gains incentive fee payable 277 — Management fees payable 5,580 4,578 Unrealized loss on derivative contracts 3,641 14,000 Accrued expenses and other liabilities payable to affiliate 3,028 3,118 Deferred tax liability 2,574 1,575 Deferred income 2,086 2,373 Total liabilities $ 1,873,761 $ 1,825,256 Commitments and contingencies (Note 8) Net assets Common shares $ 0.001 par value, unlimited shares authorized; 75,654,705 and 60,925,719 shares issued and outstanding, respectively $ 76 $ 61 Additional paid-in-capital 1,916,242 1,544,845 Total distributable earnings (loss) ( 1,663 ) ( 3,674 ) Total net assets 1,914,655 1,541,232 Total liabilities and net assets $ 3,788,416 $ 3,366,488 Net asset value per share $ 25.31 $ 25.30 The accompanying notes are an integral part of these consolidated financial statements. 2 Table of Contents TPG Twin Brook Capital Income Fund Consolidated Statements of Assets and Liabilities (Amoun

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