Blackstone Secured Lending Fund(BXSL) - 2025 Q4 - Annual Report

Assets and Management - As of December 31, 2025, Blackstone had total assets under management (AUM) of approximately $1.3 trillion, with Blackstone Credit & Insurance managing $443 billion[40]. - As of December 31, 2025, Blackstone Credit & Insurance employed 730 people globally, including a 439-person investment team[41]. - The company has a significant liquid credit platform with $123 billion, allowing it to monitor thousands of companies across public and private markets[53]. - The company has a $123 billion Liquid Corporate Credit platform, providing access to secondary market investment opportunities[75]. - The company had unfunded delayed draw term loans and revolvers totaling $1.8 billion as of December 31, 2025[97]. - The company's asset coverage was reported at 177.1% as of December 31, 2025[103]. Investment Strategy and Performance - Blackstone Credit & Insurance is invested in over 5,100 issuers globally and has over 575 sponsor and advisor relationships, enhancing its access to diverse investment opportunities[49]. - The private credit market financed 214 leveraged buyouts (LBOs) in 2025, representing 84% of total LBOs, compared to only 42 financed by publicly syndicated markets[47]. - The company aims to provide attractive yields by predominantly investing in floating rate senior secured loans, which are secured by the issuer's assets[44]. - Blackstone Credit & Insurance believes the market for lending to private companies in the U.S. is underserved, presenting compelling investment opportunities due to increasing demand for private credit[45]. - Since 2005, Blackstone Credit & Insurance has invested nearly $285 billion in privately-originated transactions, demonstrating a strong investment track record[60]. - The company targets to invest at least 80% of its total assets in secured debt investments, primarily focusing on first lien senior secured and unitranche loans[62]. - Blackstone Credit & Insurance employs a disciplined investment process with a focus on long-term credit performance and principal protection, aiming to maximize current income[59]. - The investment team consists of 114 dedicated professionals, enhancing the company's ability to source and manage investments effectively[73]. - The rigorous due diligence process includes extensive credit analysis, asset valuation, and financial modeling to ensure downside protection[77]. - The company aims to generate returns through refinancings, sales of portfolio companies, and potential initial public offerings[70]. - As of December 31, 2025, the fair value of the company's investments was $14.2 billion across 316 portfolio companies[97]. Financial Management and Incentives - The company intends to distribute substantially all available earnings annually through quarterly cash distributions, utilizing leverage to enhance potential returns[30]. - The income based incentive fee is calculated at 17.5% of the excess pre-incentive fee net investment income over a hurdle rate of 1.5% per quarter[112]. - The hurdle amount for the income based incentive fee is determined quarterly and is equal to 1.5% multiplied by the Company's net asset value at the beginning of each quarter[115]. - The capital gains based incentive fee is set at 17.5% of realized capital gains, net of realized capital losses and unrealized capital depreciation, calculated on a cumulative basis[127]. - The Company intends to distribute substantially all available earnings annually, with distributions paid quarterly as determined by the Board[133]. - If current and/or accumulated tax earnings are insufficient, distributions may be characterized as a return of capital for U.S. tax purposes[133]. - The income based incentive fee is subject to a cap based on cumulative net return, ensuring that no greater cumulative fees are paid than under previous agreements[118]. - The Company will not pay an income based incentive fee for any quarter without an Excess Income Amount[122]. - The income based incentive fee calculations are prorated for any period of less than three months and adjusted for share issuances or repurchases[121]. - The Company will accrue, but not pay, a capital gains based incentive fee for unrealized appreciation until the investment is sold[128]. Regulatory and Compliance - The company is subject to regulatory compliance and periodic examinations by the SEC under the 1940 Act[152]. - The company has adopted a code of ethics to govern personal investments and restrict certain transactions by personnel[150]. - The company may be prohibited from conducting certain transactions with affiliates without prior approval from independent trustees and, in some cases, the SEC[151]. - The company is required to maintain at least 70% of its total assets in Qualifying Assets as defined under the 1940 Act[139]. - The company is required to comply with all periodic reporting and proxy solicitation requirements under the Exchange Act[169]. Market Risks and Hedging - The company faces competition from various BDCs, investment funds, and traditional financial services, which may have lower costs and greater resources, potentially impacting investment opportunities[136]. - The company is subject to financial market risks, including valuation risk and interest rate risk, which could materially impact its market risks[729]. - The company plans to hedge against interest rate fluctuations using instruments such as interest rate swaps, futures, options, and forward contracts[735]. - In a rising interest rate environment, a hypothetical increase of 300 basis points could result in a net income of $337,251,000[734]. - As of December 31, 2025, 99.6% of the company's performing debt investments based on fair value were at floating rates[734]. Administrative and Operational Aspects - The Administrators provide various administrative and compliance services, with costs reimbursed by the Company[129]. - The Board authorized a share repurchase plan allowing the company to repurchase up to $250 million of its outstanding Common Shares over a one-year term[135]. - The investment process typically spans two to six months from initial screening to final approval and funding[81]. - The investment team consists of four to five professionals, including a senior managing director and analysts[81]. - The Investment Committee includes long-tenured professionals with an average of 16 years at Blackstone Credit & Insurance[82]. - The company actively monitors portfolio performance with a focus on anticipating negative credit events[87]. - Financial reports detailing operating performance are received on a monthly or quarterly basis from portfolio companies[88]. - The company utilizes a series of proprietary portfolio dashboards and automated reports for timely information dissemination[92].