Fidelity Private Credit Fund Assets Soar 49% Amid Income Surge

TL;DR

**Fidelity Private Credit Fund is aggressively expanding its portfolio and leveraging up, but watch those unrealized losses – they could bite.**

AI Summary

Fidelity Private Credit Fund reported a significant increase in total assets, reaching $2.12 billion as of September 30, 2025, up from $1.42 billion at December 31, 2024, representing a 49.3% growth. Total investment income for the nine months ended September 30, 2025, surged to $142.20 million, a substantial increase from $77.36 million for the same period in 2024, marking an 83.8% rise. Net investment income after taxes also saw a robust increase, climbing to $73.71 million for the nine months ended September 30, 2025, compared to $44.91 million in 2024, a 64.1% improvement. However, the fund experienced a net realized loss of $1.90 million and a net change in unrealized depreciation of $16.13 million for the nine months ended September 30, 2025, contrasting with a net realized gain of $62,701 and net unrealized depreciation of $4.41 million in the prior year. Debt increased to $914.73 million from $611.07 million, reflecting increased leverage. Net assets grew to $1.16 billion from $775.09 million, driven by significant share transactions, with proceeds from shares sold totaling $382.92 million for Class I shares in the nine-month period.

Why It Matters

This significant growth in assets and investment income for Fidelity Private Credit Fund indicates strong demand for private credit investments and effective capital deployment by the fund. For investors, the substantial increase in net investment income to $73.71 million suggests healthy operational performance, though the net realized and unrealized losses warrant closer scrutiny regarding portfolio quality. Employees benefit from a growing fund, potentially leading to more opportunities. In the broader market, this growth highlights the increasing prominence of private credit as an alternative to traditional lending, intensifying competition for other private credit providers and potentially impacting bank lending. The fund's ability to raise $382.92 million in Class I share proceeds demonstrates investor confidence in its strategy.

Risk Assessment

Risk Level: medium — The fund's risk level is medium due to a significant increase in debt to $914.73 million as of September 30, 2025, up from $611.07 million at December 31, 2024, indicating higher leverage. Additionally, the net change in unrealized depreciation on investments worsened to $(16,364,563) for non-controlled/non-affiliate investments for the nine months ended September 30, 2025, compared to $(4,629,330) in the prior year, suggesting potential valuation challenges in its portfolio.

Analyst Insight

Investors should scrutinize the quality of the fund's underlying loan portfolio, particularly given the increase in unrealized depreciation. While income growth is strong, monitor future filings for trends in credit quality and default rates, and consider if the increased leverage aligns with your risk tolerance.

Financial Highlights

debt To Equity

0.79

revenue

$142.20M

operating Margin

N/A

total Assets

$2.12B

total Debt

$0.91B

net Income

$73.71M

eps

$25.27

gross Margin

N/A

cash Position

$35.34M

revenue Growth

+83.8%

Revenue Breakdown

Key Numbers

• $2.12B — Total Assets (Increased 49.3% from $1.42B at Dec 31, 2024 to $2.12B at Sep 30, 2025)
• $142.20M — Total Investment Income (Increased 83.8% for the nine months ended Sep 30, 2025, from $77.36M in 2024)
• $73.71M — Net Investment Income After Taxes (Increased 64.1% for the nine months ended Sep 30, 2025, from $44.91M in 2024)
• $1.90M — Net Realized Loss (Reported for the nine months ended Sep 30, 2025, compared to a $62,701 gain in 2024)
• $16.13M — Net Change in Unrealized Depreciation (Worsened for the nine months ended Sep 30, 2025, from $4.41M in 2024)
• $914.73M — Total Debt (Increased from $611.07M at Dec 31, 2024, to $914.73M at Sep 30, 2025)
• $1.16B — Total Net Assets (Increased from $775.09M at Dec 31, 2024, to $1.16B at Sep 30, 2025)
• $382.92M — Proceeds from Class I Shares Sold (Significant capital raise for the nine months ended Sep 30, 2025)
• 45,955,107 — Class I Shares Outstanding (As of September 30, 2025, up from 30,050,646 at December 31, 2024)
• $25.27 — Class I Net Asset Value Per Share (As of September 30, 2025, down from $25.75 at December 31, 2024)

Key Players & Entities

• Fidelity Private Credit Fund (company) — Registrant
• Fidelity Diversifying Solutions LLC (company) — Adviser
• $2.12 billion (dollar_amount) — Total Assets as of September 30, 2025
• $1.42 billion (dollar_amount) — Total Assets as of December 31, 2024
• $142.20 million (dollar_amount) — Total Investment Income for nine months ended September 30, 2025
• $77.36 million (dollar_amount) — Total Investment Income for nine months ended September 30, 2024
• $73.71 million (dollar_amount) — Net Investment Income After Taxes for nine months ended September 30, 2025
• $44.91 million (dollar_amount) — Net Investment Income After Taxes for nine months ended September 30, 2024
• $914.73 million (dollar_amount) — Debt as of September 30, 2025
• $611.07 million (dollar_amount) — Debt as of December 31, 2024

FAQ

Risk Factors

• Market Value Fluctuations [medium — financial]: The fund experienced a net change in unrealized depreciation of $16.13 million for the nine months ended September 30, 2025, a significant worsening from $4.41 million in the prior year. This indicates that the fair value of the fund's investments has decreased, impacting overall asset value.
• Leverage Risk [high — financial]: Total debt increased by 49.7% from $611.07 million to $914.73 million. While leverage can amplify returns, it also magnifies losses and increases the fund's sensitivity to interest rate changes and market downturns.
• Realized Losses [medium — financial]: The fund reported a net realized loss of $1.90 million for the nine months ended September 30, 2025, a shift from a small net realized gain of $62,701 in the comparable period of 2024. This suggests that some investments were sold at a loss.
• Interest Rate Sensitivity [medium — market]: As a credit fund, its investments are sensitive to interest rate movements. Rising interest rates can decrease the value of existing fixed-income investments and increase borrowing costs for the fund.

Industry Context

The private credit market continues to attract significant capital due to its potential for attractive yields compared to traditional fixed income. However, it faces increasing competition and evolving regulatory scrutiny. Funds like Fidelity Private Credit are leveraging growth through capital raises, but must navigate rising interest rates and credit risk.

Regulatory Implications

As a registered investment company, Fidelity Private Credit Fund is subject to regulations under the Investment Company Act of 1940. Increased leverage and complex investment strategies may attract closer regulatory attention regarding risk management and disclosure.

What Investors Should Do

1. Analyze the drivers of unrealized depreciation.
2. Evaluate the impact of increased leverage.
3. Monitor Net Asset Value (NAV) per share trends.
4. Scrutinize realized losses.

Key Dates

• 2025-09-30: Quarter End Reporting — Represents the period for which the 10-Q financial statements are reported, showing significant asset and income growth but also increased leverage and unrealized losses.
• 2025-12-31: Prior Year End Reporting — Provides a baseline for comparison, showing a smaller asset base, lower income, and less debt compared to the current reporting period.

Glossary

Amortized Cost

The initial cost of a debt instrument, adjusted over time for amortization of any premium or discount and for principal repayments. (Used to report the cost basis of the fund's investments, providing context for fair value assessments.)

Net Asset Value (NAV) Per Share

The value of one share of a mutual fund, calculated by dividing the total value of the fund's assets minus its liabilities by the number of outstanding shares. (Indicates the per-share market value of the fund's holdings. A decrease from $25.75 to $25.27 suggests a slight decline in per-share value despite overall asset growth.)

Unrealized Depreciation

A decrease in the fair value of an investment that has not yet been sold. It represents a potential loss. (A key indicator of market risk and investment performance, showing a significant increase in paper losses for the fund.)

Paid-in-capital in excess of par value

The amount investors have paid for shares above their nominal par value. (Reflects the capital raised from investors, showing substantial growth from $768.54 million to $1.18 billion, driven by share sales.)

Year-Over-Year Comparison

Fidelity Private Credit Fund has demonstrated substantial growth in total assets, up 49.3% to $2.12 billion, and a significant surge in total investment income, increasing by 83.8% to $142.20 million for the nine-month period. Net investment income after taxes also saw robust growth of 64.1%. However, this expansion was accompanied by a notable increase in leverage, with total debt rising by nearly 50% to $914.73 million, and a deterioration in investment performance, evidenced by a $1.90 million net realized loss and a $16.13 million net change in unrealized depreciation, compared to gains and smaller depreciation in the prior year. The Class I Net Asset Value per share also saw a slight decline.

Key Financial Figures

• $0.01 — hares of beneficial interest, par value $0.01 Class S Common shares of beneficial i

Filing Documents

• ck0001920453-20250930.htm (10-Q) — 16018KB
• ck0001920453-ex31_1.htm (EX-31.1) — 18KB
• ck0001920453-ex31_2.htm (EX-31.2) — 18KB
• ck0001920453-ex32_1.htm (EX-32.1) — 10KB
• ck0001920453-ex32_2.htm (EX-32.2) — 10KB
• 0001193125-25-277125.txt ( ) — 45784KB
• ck0001920453-20250930.xsd (EX-101.SCH) — 2632KB
• ck0001920453-20250930_htm.xml (XML) — 12583KB

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 44 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 78 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 95 Item 4.

Controls and Procedures

Controls and Procedures 95 PART II. OTHER INFORMATION 96 Item 1.

Legal Proceedings

Legal Proceedings 96 Item 1A.

Risk Factors

Risk Factors 96 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 96 Item 3. Defaults Upon Senior Securities 96 Item 4. Mine Safety Disclosures 96 Item 5. Other Information 97 Item 6. Exhibits 97

Signatures

Signatures 98 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are current expectations, estimates, and projections of Fidelity Private Credit Fund (the "Fund," "we," "us" or "our") and/or Fidelity Diversifying Solutions LLC ("FDS" or the "Adviser") about the Fund, our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "should," "seek," "expect," "anticipate," "project," "estimate," "intend," "continue," "target," or "believe" or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the Fund may differ materially from those reflected or contemplated in such forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation: our future operating results; our business prospects and the prospects of our portfolio companies; our ability to raise capital; geo-political conditions, including revolution, insurgency, terrorism or war, including those arising out of the ongoing conflict in Ukraine and Israel; the ability of our portfolio companies to achieve their objectives; our current and expected financing arrangements and investments; changes in the general interest rate environ

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements. Fidelity Private Credit Fund Consolidated Statements of Assets and Liabilities September 30, 2025 December 31, 2024 (unaudited) Assets Investments at fair value Non-controlled / non-affiliate investments (amortized cost $ 1,916,667,067 and $ 1,315,878,064 as of September 30, 2025 and December 31, 2024, respectively) $ 1,905,694,999 $ 1,321,270,559 Non-controlled / affiliate investments (amortized cost $ 136,427,205 and $ 47,327,982 as of September 30, 2025 and December 31, 2024, respectively) 135,839,014 47,969,881 Cash 35,339,292 18,260,082 Foreign cash (cost $ 162,182 and $ 80,238 as of September 30, 2025 and December 31, 2024, respectively) 160,252 78,147 Segregated cash with brokers for derivative instruments 4,441,058 — Receivable for daily variation margin on centrally cleared swaps 90,544 — Deferred financing costs 13,578,614 6,643,073 Receivables from sales and paydowns of investments 2,524,887 5,451,608 Interest receivable 21,431,628 17,605,385 Dividend receivable 866,977 344,043 Prepaid expenses and other assets 7,899 100,776 Total Assets $ 2,119,975,164 $ 1,417,723,554 Liabilities Debt (net of unamortized debt issuance costs $ 2,386,695 and $ 0 as of September 30, 2025 and December 31, 2024, respectively) 914,726,907 611,070,855 Payable for purchases of investments 3,910,206 3,960,000 Payable for capital shares repurchased 7,463,876 5,590,585 Distributions payable 8,855,821 11,207,148 Interest payable 14,302,580 5,229,723 Deferred revenue 436,084 — Management fee payable 1,225,483 818,848 Income based incentive fee payable 3,807,793 2,805,856 Capital gains incentive fee payable — 822,417 Due to affiliates, net 460,158 201,579 Other accounts payable and accrued liabilities 971,807 921,862 Total Liabilities $ 956,160,715 $ 642,628,873 Commitmen

View Full Filing

View this 10-Q filing on SEC EDGAR