Fidelity Private Credit Fund released its investment strategy quarterly report for the second quarter ended June 30, 2025, detailing its portfolio performance and the direct lending market outlook.
For Class I shares, the Fund reported a total net return of 0.77% for one month, 2.07% for three months, 3.82% year-to-date, and 9.40% for one year as of June 30, 2025. New investments during the quarter included stakes in Penta Fine Ingredients, Sweetmore Bakeries, and Torginol.
The broader Private Credit market rallied in early April, and the benchmark 10-year Treasury closed the second quarter near 4.2%. SOFR rates, typically used for corporate loans, compressed due to revised expectations. Direct lending's net supply slowed amid M&A activity during the second quarter, which narrowed credit spreads. Despite this, the Fund noted it maintains a compelling spread premium of 220 basis points over high-yield bonds, 120 basis points over leveraged loans, and 500 basis points over investment-grade bonds.
