Fidelity Nontraded BDC Returns 3.78% YTD as Outperformance Margin Narrows

Fidelity Private Credit Fund posted a 3.78% year-to-date total net return for its Class I common shares through July, outperforming leveraged loans by 157 basis points and high-yield bonds by 219 basis points, the fund disclosed Aug. 27.

The nontraded business development company disclosed net asset value per share of $24.69 for Class I shares, $24.66 for Class S shares, and $24.69 for Class D shares as of July 31. NAV per share declined $0.03 during the month. The fund reported net investment income of $0.21 per share, realized losses of $0.16 per share, and unrealized gains of $0.11 per share for the month.

The fund also declared an August distribution of $0.1750 per share, plus a $0.0160 supplemental distribution.

Fidelity attributed the fund’s year-to-date outperformance to modest software-sector exposure and disciplined underwriting. The fund reported a weighted-average loan mark of 98.4 and zero investments on non-accrual status as of July 31.

As of July 31, the fund held an aggregate NAV of $1.4 billion against an investment portfolio with a fair value of $2.5 billion. Principal debt outstanding totaled $1.1 billion, putting the fund’s debt-to-equity ratio at approximately 0.83x.

Fidelity also disclosed that STG Distribution LLC, a broadly syndicated borrower that represented 0.3% of the fund’s portfolio fair value as of June 30, emerged from bankruptcy in July. The fund’s previously accumulated unrealized losses on the position converted to realized losses, though the overall impact to NAV was largely neutral, offset by unrealized gains elsewhere in the portfolio.

On the capital-raising side, Fidelity Private Credit Fund had raised $1.42 billion across 55.8 million shares as of Aug. 1 in its continuous offering, which carries a $4 billion target. The fund continues to sell shares monthly.

AltsWire reported in the first quarter that the fund posted a 1.71% quarterly return, outperforming leveraged loans by 226 basis points – a wider margin than the 157 basis points reported in this month’s year-to-date figure. The fund has also drawn recent AltsWire coverage for more than doubling its revolving credit facility and for opening a tender offer alongside Bain Capital and T. Rowe Price OHA’s nontraded BDCs.

Fidelity Private Credit Fund, sponsored by Fidelity Investments, invests in directly originated private credit.

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