PIMCO Capital Solutions Posts Strong Q2 Growth

Despite a dip in investment income and modest unrealized losses, the firm saw net asset growth and continued portfolio diversification.

August 15, 2025

Net Asset Value Holds Up

PIMCO Capital Solutions BDC Corp. closed out the second quarter of 2025 with measured growth, increased leverage, and steady asset performance—even as income and market valuations showed signs of pressure.

As of June 30, net assets stood at $205.4 million, up from $200.99 million at year-end. That gain came despite $2.75 million in distributions to shareholders during the period. NAV per share rose to $8.90, up from $8.71.

The company’s operations generated $7.1 million in net gains over six months, driven by $9 million in net investment income. While total realized and unrealized losses weighed on results—particularly in the first quarter—they were offset by stronger second-quarter activity.

Investment Income Slows, But Remains Solid

Investment income for the first half of 2025 came in at $11.9 million—just below the $12 million reported during the same period last year. The drop reflects softer interest income and lower payment-in-kind (PIK) interest. That said, core income sources remain stable, and the decline wasn’t driven by any material deterioration in credit quality.

Expenses rose to $4.2 million from $2.6 million in the year-ago period, with most of that increase tied to interest expense. The firm continues to waive management fees, helping keep net expenses in check. Net investment income per share landed at $0.39 over six months.

Borrowing and Portfolio Allocation

PIMCO Capital Solutions increased its use of leverage this quarter. Debt outstanding rose to $54.5 million—up from $28.2 million at the end of 2024. The company is now using more than half of its $100 million credit facility. This increase in borrowing supported new investments and reflected a continued drawdown of capital commitments.

The portfolio remains primarily focused on senior secured debt. As of quarter-end, investments totaled $244.4 million at fair value. Technology, services, and industrials continue to represent the most active sectors, with exposure diversified across more than 60 positions. Short-term investments, including U.S. Treasury bills, make up a meaningful portion of the portfolio and add liquidity flexibility.

Liquidity and Capital Position

Cash and equivalents increased sharply during the quarter—rising to $20.1 million from just $2.2 million at the start of the year. Of that, $5.1 million is restricted cash tied to the credit facility, but $14.9 million remains available for operations or new investments.

All capital commitments—totaling $216 million—have been fully drawn, and the company now operates on a perpetual capital base. There were no redemptions or share repurchases in the second quarter.

Steady Operations Under a Flexible Model

With no fixed maturity and an externally managed structure, PIMCO Capital Solutions continues to operate with long-term flexibility. Its focus on private debt and equity in the middle market, backed by the scale and infrastructure of PIMCO, supports its ability to deploy capital across changing credit conditions.

While some segments of income performance softened, core results were stable. And with leverage stepping up and liquidity intact, the firm is positioned to stay active in the second half of the year.