Q4 2025 Blackstone Secured Lending Fund Earnings Call Transcript
Key Points
- Blackstone Secured Lending Fund (BXSL) reported a strong net investment income of $0.80 per share, representing an 11.8% annualized return on equity.
- The fund's distribution of $0.77 per share was 104% covered by net investment income, indicating strong dividend coverage.
- BXSL outperformed the leveraged loan market by 360 basis points, delivering a 9.6% net return for the year.
- The fund has a significant amount of dry powder, over $40 billion, to invest in direct lending, positioning it well for future opportunities.
- BXSL's portfolio is predominantly first-lien, with a focus on high-quality, private equity-owned businesses, contributing to its defensive strategy.
- The net asset value per share decreased to $26.92 from $27.15, primarily due to net unrealized losses in the portfolio.
- Non-accruals increased to 0.6% at cost, up from 0.3% in the previous year, indicating some deterioration in asset quality.
- There is ongoing external focus and concern about AI's impact on software companies, which could affect certain portfolio segments.
- The fund is trading below book value, which may limit its ability to raise capital through equity markets.
- Some portfolio companies are facing operational challenges, leading to markdowns and potential risks to recovery rates.
Good day, and welcome to the Blackstone Secured Lending fourth-quarter and full-year 2025 investor call. Today's conference is being recorded. (Operator Instructions) At this time, I'd like to turn the call over to Stacy Wang, Head of Stakeholder Relations. Please go ahead.
Thank you, Katie. Good morning, and welcome to Blackstone Secure Lending Fund fourth-quarter and full-year results conference call. Joining me today are Brad Marshall, Co-Chief Executive Officer; and Teddy Desloge, Chief Financial Officer, along with other members of the management team available for Q&A, including John Bock, Co-Chief Executive Officer; and Carlos Whittaker, President. Earlier today, we issued a press release with a presentation of our results and filed our 10-K, both of which are available on the Shareholder Resources section of our website, www.bxsl.com. We will be referring to that presentation throughout today's call.
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