TPG Twin Brook Sees Strong Income Growth, NAV Dips Slightly

TL;DR

**TPG Twin Brook is generating more income, but watch out for those unrealized losses dragging down NAV.**

AI Summary

TPG Twin Brook Capital Income Fund reported a net increase in net assets from operations of $132,934 thousand for the nine months ended September 30, 2025, up from $98,445 thousand for the same period in 2024. Total investment income for the nine months ended September 30, 2025, reached $288,552 thousand, a significant increase from $192,725 thousand in the prior year. Net investment income after taxes also rose to $140,564 thousand from $97,294 thousand. However, the fund experienced a net change in unrealized loss on investment transactions of $(8,685) thousand for the nine months ended September 30, 2025, compared to a $(2) thousand loss in the prior year. Total assets increased to $4,100,234 thousand as of September 30, 2025, from $3,366,488 thousand at December 31, 2024, driven by growth in investments at fair value. Net asset value per share slightly decreased to $25.15 from $25.30. The fund's debt increased to $1,900,691 thousand from $1,745,999 thousand, reflecting increased borrowings to finance investments. Proceeds from the issuance of common shares were $607,980 thousand for the nine months ended September 30, 2025.

Why It Matters

TPG Twin Brook Capital Income Fund's robust investment income growth, up 49.7% year-over-year, signals strong performance in its core lending activities, which is positive for investors seeking income. However, the slight dip in Net Asset Value per share from $25.30 to $25.15, coupled with an increase in unrealized losses on investments, suggests potential valuation pressures or credit quality concerns in its portfolio. This mixed performance could impact investor confidence and the fund's competitive positioning against other private credit funds, especially as interest rates remain elevated, influencing both income generation and debt servicing costs.

Risk Assessment

Risk Level: medium — The fund's risk level is medium due to a significant increase in debt to $1,900,691 thousand from $1,745,999 thousand, indicating higher leverage. Additionally, the net change in unrealized loss on investment transactions worsened to $(8,685) thousand for the nine months ended September 30, 2025, from $(2) thousand in the prior year, suggesting potential deterioration in portfolio valuations.

Analyst Insight

Investors should scrutinize the underlying reasons for the increased unrealized losses and the slight NAV per share decrease, despite strong investment income. Consider the fund's exposure to specific sectors and individual loan performance, as increased leverage could amplify losses if market conditions or credit quality decline.

Financial Highlights

debt To Equity

0.89

revenue

$288,552,000

operating Margin

N/A

total Assets

$4,100,234,000

total Debt

$1,900,691,000

net Income

$140,564,000

eps

$25.15

gross Margin

N/A

cash Position

$152,474,000

revenue Growth

+49.7%

Revenue Breakdown

Key Numbers

• $288.55M — Total Investment Income (Increased from $192.73M in 2024, a 49.7% rise.)
• $140.56M — Net Investment Income After Taxes (Increased from $97.29M in 2024, a 44.5% rise.)
• $132.93M — Net Increase in Net Assets from Operations (Increased from $98.45M in 2024, a 35.0% rise.)
• $(8.69M) — Net Change in Unrealized Loss on Investment Transactions (Worsened from $(2) thousand in 2024, indicating valuation pressures.)
• $25.15 — Net Asset Value per Share (Slightly decreased from $25.30 at December 31, 2024.)
• $1.90B — Debt (Increased from $1.75B at December 31, 2024, reflecting higher leverage.)
• $607.98M — Proceeds from Issuance of Common Shares (For the nine months ended September 30, 2025, indicating capital raising activity.)
• $4,100,234 — Total Assets (Increased from $3,366,488 at December 31, 2024, showing growth in the fund's scale.)
• $51,595 — Net Expenses (3 months ended Sep 30, 2025) (Increased from $41,250 in the prior year, reflecting higher operational costs.)
• $145,531 — Net Increase (decrease) in net assets resulting from dividends (9 months ended Sep 30, 2025) (Increased from $95,503 in the prior year, indicating higher dividend payouts.)

Key Players & Entities

• TPG Twin Brook Capital Income Fund (company) — registrant
• $132,934 thousand (dollar_amount) — net increase in net assets from operations for nine months ended Sep 30, 2025
• $98,445 thousand (dollar_amount) — net increase in net assets from operations for nine months ended Sep 30, 2024
• $288,552 thousand (dollar_amount) — total investment income for nine months ended Sep 30, 2025
• $192,725 thousand (dollar_amount) — total investment income for nine months ended Sep 30, 2024
• $140,564 thousand (dollar_amount) — net investment income after taxes for nine months ended Sep 30, 2025
• $97,294 thousand (dollar_amount) — net investment income after taxes for nine months ended Sep 30, 2024
• $(8,685) thousand (dollar_amount) — net change in unrealized loss on investment transactions for nine months ended Sep 30, 2025
• $4,100,234 thousand (dollar_amount) — total assets as of September 30, 2025
• $25.15 (dollar_amount) — net asset value per share as of September 30, 2025

FAQ

Risk Factors

• Unrealized Loss on Investments [medium — market]: The fund experienced a net change in unrealized loss on investment transactions of $(8,685,000) for the nine months ended September 30, 2025, a significant worsening from a $(2,000) loss in the prior year. This indicates potential valuation pressures on the fund's investment portfolio.
• Increased Leverage [medium — financial]: Total debt increased to $1,900,691,000 from $1,745,999,000 at December 31, 2024. This increase in borrowings is used to finance investments, which amplifies both potential returns and risks associated with higher leverage.
• Net Asset Value per Share Decline [low — market]: The net asset value per share slightly decreased to $25.15 from $25.30 at December 31, 2024. This suggests that while the fund's total assets grew, the increase in liabilities or a decrease in the value of underlying assets outpaced the growth on a per-share basis.

Industry Context

The fund operates within the credit income sector, likely focusing on direct lending or private credit strategies. This sector is characterized by a demand for yield, often leading to increased leverage and exposure to credit risk. Competition is high, with many funds seeking to deploy capital in a similar space, driving the need for strong origination and risk management capabilities.

Regulatory Implications

As a registered investment company, TPG Twin Brook Capital Income Fund is subject to regulations governing investment advisers, disclosure requirements, and capital adequacy. Changes in accounting standards or regulatory oversight could impact reporting, valuation, and operational costs.

What Investors Should Do

1. Monitor unrealized losses closely.
2. Evaluate the impact of increased leverage.
3. Assess the sustainability of dividend payouts.
4. Compare NAV per share trend with peers.

Key Dates

• 2025-09-30: Nine Months Ended — Reporting period for significant increases in total investment income, net investment income, and net assets from operations, alongside a notable increase in unrealized losses and debt.
• 2024-12-31: Year-End — Prior period comparison point for total assets, debt, and net asset value per share, showing substantial growth in assets and debt.

Glossary

Net assets

The total value of a fund's assets minus its liabilities. It represents the net worth of the fund available to shareholders. (Key indicator of the fund's overall value and is used to calculate net asset value per share.)

Net asset value per share

The value of one share of a mutual fund or ETF, calculated by dividing the total value of the fund's assets minus its liabilities by the number of outstanding shares. (Provides a per-share measure of the fund's performance and value, crucial for investor assessment.)

Unrealized loss

A loss on an investment that has not yet been sold. The value of the investment has decreased, but the loss is not realized until the investment is sold. (Indicates potential future losses if the investments are sold at their current reduced values, impacting the fund's overall performance.)

Amortized cost

The initial cost of a financial asset or liability, adjusted over time to account for the amortization of any premium or discount, and any direct and incremental costs of acquisition or origination. (Used as a basis for valuing investments, providing a historical cost perspective alongside fair value.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, TPG Twin Brook Capital Income Fund has demonstrated robust growth in total investment income (+49.7%) and net investment income after taxes (+44.5%), leading to a higher net increase in net assets from operations (+35.0%). However, this growth has been accompanied by a substantial increase in unrealized losses on investments, worsening from a nominal amount to $(8.69M), and a significant rise in total debt to $1.90B, indicating increased leverage. While total assets have grown considerably, the net asset value per share has seen a slight decline, suggesting that the growth in liabilities and unrealized losses has outpaced the per-share value increase.

Key Financial Figures

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

Filing Documents

• tcap-20250930.htm (10-Q) — 11136KB
• exhibit311q325.htm (EX-31.1) — 9KB
• exhibit312q325.htm (EX-31.2) — 9KB
• exhibit321q325.htm (EX-32.1) — 4KB
• exhibit322q325.htm (EX-32.2) — 4KB
• 0001913724-25-000088.txt ( ) — 34562KB
• tcap-20250930.xsd (EX-101.SCH) — 78KB
• tcap-20250930_cal.xml (EX-101.CAL) — 100KB
• tcap-20250930_def.xml (EX-101.DEF) — 573KB
• tcap-20250930_lab.xml (EX-101.LAB) — 804KB
• tcap-20250930_pre.xml (EX-101.PRE) — 646KB
• tcap-20250930_htm.xml (XML) — 7965KB

Financial Statements

Financial Statements 2 Consolidated Statements of Assets and Liabilities as of September 30, 2025 (Unaudited) and December 31, 2024 2 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 4 Consolidated Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 8 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 6 Consolidated Schedules of Investments as of September 30, 2025 (Unaudited) and December 31, 2024 9

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 67 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 112 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 134 Item 4.

Controls and Procedures

Controls and Procedures 135 PART II OTHER INFORMATION 136 Item 1.

Legal Proceedings

Legal Proceedings 136 Item 1A.

Risk Factors

Risk Factors 136 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 136 Item 3. Defaults Upon Senior Securities 136 Item 4. Mine Safety Disclosures 136 Item 5. Other Information 136 Item 6. Exhibits 137

Signatures

Signatures 138 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) September 30, 2025 December 31, 2024 (Unaudited) Assets Investments at fair value: Non-controlled/non-affiliated investments at fair value (amortized cost of $ 3,821,388 and $ 3,084,619 , respectively) $ 3,804,018 $ 3,080,569 Non-controlled/affiliated investments at fair value (amortized cost of $ 85,589 and $ 74,552 , respectively) 96,668 80,654 Cash and cash equivalents (restricted cash of $ 68,451 and $ 71,863 , respectively) 152,474 161,064 Deferred financing costs 24,675 27,997 Interest receivable 16,568 12,479 Unrealized gain on derivative contracts 4,098 1,021 Other assets 867 612 Deferred offering costs 475 1,035 Prepaid expenses 391 1,057 Total assets $ 4,100,234 $ 3,366,488 Liabilities Debt (Note 5) 1,900,691 1,745,999 Interest payable 24,470 33,546 Dividend payable 18,513 14,602 Income incentive fee payable 7,388 5,465 Management fees payable 6,284 4,578 Accrued expenses and other liabilities payable to affiliate 5,315 3,118 Deferred tax liability 2,821 1,575 Unrealized loss on derivative contracts 2,655 14,000 Deferred income 2,361 2,373 Total liabilities $ 1,970,498 $ 1,825,256 Commitments and contingencies (Note 8) Net assets Common shares $ 0.001 par value, unlimited shares authorized; 84,687,951 and 60,925,719 shares issued and outstanding, respectively $ 85 $ 61 Additional paid-in-capital 2,144,301 1,544,845 Total distributable earnings (loss) ( 14,650 ) ( 3,674 ) Total net assets 2,129,736 1,541,232 Total liabilities and net assets $ 4,100,234 $ 3,366,488 Net asset value per share $ 25.15 $ 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 (Amounts in thousands, except share and per

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