Blackstone Group LP (BX) - Get Report , the largest publicly traded U.S. private equity firm, posted its first quarterly loss in three years, as tumultuous markets late last year took a toll on the value of investments. 

The net loss of $79.7 million compared with a profit of $803.5 million a year earlier, the New York-based company said Thursday in a statement.

Revenue tumbled by 74% to $505 million, while expenses, mostly compensation, fell by just 53%. The company benefited from lower taxes, following a reduction in the corporate rate from President Donald Trump's law signed in late 2017.

"The fourth quarter was an extremely difficult period for markets and for most participants in the financial community," CEO Stephen Schwarzman told analysts on a conference call, according to a transcript.

Blackstone shares have rallied this year, along with the recovery in U.S. stock markets, but they're still down 7.7% over the past 12 months. On Thursday they rose 1.8% to $33.72.  

On the conference call, executives faced questions over the firm's exposure to so-called leveraged loans: money borrowed by companies with junk-grade credit ratings. Such lending has drawn scrutiny from the Federal Reserve and International Monetary Fund, which have warned recently about a surge in activity at the same time that underwriting standards are loosening. 

The concern has grown more acute as more economists project a slowdown in growth this year or even a recession by 2020, a development that would likely make it harder for deeply indebted corporate borrowers to repay the money they owe.  

Blackstone not only uses leveraged loans to fund its acquisition of companies, in the flagship private equity business, but the firm in recent years has expanded into the business of direct lending and invests in the loans via specialized vehicles known as collateralized loan obligations, or CLOs.  

"Despite investor concerns around the leveraged loan market, in particular, we haven't seen a deterioration in the credit quality of our holdings, and our default rates remain close to zero," Chief Operating Officer Jonathan Gray said on the conference call.