Blackstone cuts value of private credit fund in first quarter

By Matt Tracy

May 7 (Reuters) - ‌Asset manager ​Blackstone ​cut the value of its private credit fund Blackstone Secured Lending Fund in the first ‌quarter, it said on Thursday.

Blackstone Secured Lending Fund's ⁠net asset value (NAV) per share dropped 2.4% to $26.26 in the first ‌quarter at fair value, ‌according to its earnings disclosure.

Investors have taken a closer look at the portfolios of private credit funds known ​as business development companies, as advances in artificial intelligence threaten the business models of companies in the ⁠software sector.

Blackstone Secured Lending Fund had about 20% of its portfolio in ​software names at fair value, at the end of March, according to its quarterly report.

Its portfolio's ​non-accrual rate, or the percentage ‌of its loans that are well behind on interest payments, was just over 3% last ⁠quarter, it said.

Executives for the fund addressed the non-accrual rate on the earnings call on Thursday. The fund said its ⁠largest loan on non-accrual, to software firm Medallia, was making progress in ​restructuring and that Blackstone planned to invest new capital in the business with partners to delever its balance sheet and invest ‌in new AI features.

The fund also declared a 77-cent dividend, in line with past ‌quarters, it said.

It saw $450 million in repayments within its ⁠portfolio in the first quarter, ‌while new investments ​totaled almost $325 million, it said.

(Reporting by Matt Tracy in Washington; Editing by Chizu Nomiyama and Emelia ‌Sithole-Matarise)

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