Profit at Blackstone Inc.'s publicly traded private credit fund dropped 94% in the second quarter as the value of holdings declined, though the performance of loans steadied.

The sharp decline in earnings reflects markdowns across the portfolio of Blackstone Secured Lending Fund, the firm's business development company. Net asset value per share fell during the period, pressured by broader credit market volatility and widening spreads that affected valuation multiples.

Despite the profit collapse, management highlighted that underlying loan performance has stabilized. Non-accrual loans remained low and new defaults were minimal, suggesting the credit quality of the portfolio is holding up amid economic uncertainty and higher interest rates.

The BDC continues to focus on senior secured loans to middle-market companies, with a portfolio weighted toward defensive sectors. Investors are watching for signs of a recovery in net investment income as the Federal Reserve's rate cycle evolves and deal flow picks up.