Blackstone yesterday outlined a strategy to profit from the turmoil in the debt markets as it reported a $66.5m first-quarter loss that reflected a writedown on its investment in Deutsche Telekom and the dramatic decline in private equity activity.

The loss contrasted with a gain of $838.5m last year but Blackstone expressed confidence it could take advantage of the crisis in the credit markets by buying distressed debt - an increasingly popular strategy for private equity firms.