Fidelity Private Credit Fund Reports 1.71% Q1 Return, Outperforming Leveraged Loans by 226 Basis Points

Fidelity Private Credit Fund, the nontraded business development company sponsored by Fidelity Investments, reported a Class I total net return of 1.71% for the first quarter of 2026 and outperformed both leveraged loans and high yield bonds by 226 basis points.

The fund reported a net asset value per share of $24.95 for Class I and Class D shares and $24.93 for Class S shares as of March 31, 2026. The fund’s aggregate NAV reached approximately $1.3 billion, with the fair value of its investment portfolio at approximately $2.5 billion and outstanding principal debt of approximately $1.2 billion, resulting in a debt-to-equity ratio of approximately 0.87 times.

The fund earned net investment income of $0.57 per share during the quarter and distributed $0.57 per share, exactly matching investment income to distributions. A net realized and unrealized loss of $0.12 per share and a non-cash $0.03 per share unrealized adjustment on an interest rate swap reduced quarter-end NAV from prior levels. The fund described the swap as a hedge that aligns its fixed-rate liabilities with its predominantly floating-rate asset base.

Since inception in March 2023, the fund has earned cumulative net investment income of $7.64 per share and distributed $7.69 per share through March 2026, per Fidelity. The fund’s direct lending portfolio carried a weighted-average mark of 98.75 at quarter end.

The fund’s adviser, Fidelity Diversifying Solutions LLC, provided a substantive market commentary addressing the macro and credit-market environment that shaped first quarter results.

“Tensions in the Middle East pushed the price of Brent crude oil to as high as $120, reignited inflation concerns and pushed out expectations for near term policy easing,” the commentary stated, going on to note that intermediate and long-dated Treasury yields rose roughly 30 to 50 basis points from late February through quarter end, with the 10-year Treasury moving 30 basis points in a single month “without a Fed policy change during a geopolitical shock.”

The update also pointed to a 32% year-over-year decline in leveraged loan activity – “the slowest start since 2020” – and a software-sector valuation reset that accelerated in February. “Together with the late quarter energy shock, the software reset tightened financial conditions, reduced new activity and shifted terms toward lenders.”

The fund attributed its outperformance versus public credit benchmarks to “modest software exposure, conservative structures and steady income.”

Fidelity Private Credit Fund declared monthly distributions for April 2026 of $0.1750 per share on a gross basis for all three share classes. After application of the stockholder servicing fee, net distributions were $0.1750 per Class I share, $0.1698 per Class D share, and $0.1573 per Class S share. In addition, the fund declared variable supplemental distributions of $0.0160 per share for each class. Both the monthly and variable supplemental distributions are payable to shareholders of record as of April 30, 2026, and will be paid on or about May 29, 2026.

The fund is publicly offering up to $4 billion in shares on a continuous basis. As of the date of the filing, cumulative capital raised totaled approximately $1.382 billion, including 53,813,312 Class I shares for $1,371.8 million, 112,816 Class S shares for $2.9 million, and a small amount of Class D shares from the public offering, plus 300,423 Class I shares from the fund’s private offering for $7.6 million.

AltsWire previously reported that Fidelity Private Credit Fund more than doubled its revolving credit facility in April 2025, expanding the maximum facility from $500 million to $1.13 billion with a JPMorgan Chase-led syndicate. The fund broke escrow with approximately $102 million in March 2023 following its January 2023 launch as Fidelity’s first nontraded BDC.

The fund is managed by Fidelity Diversifying Solutions LLC, with David Gaito serving as portfolio manager and head of direct lending. Fidelity established its direct lending business in 2021.

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