In February, direct lending funds managed by HPS Investment Partners and BlackRock Inc. posted negative returns, marking their weakest monthly performance in over three years.

Blue Owl Credit Income Corp., a private business development company, reported a loss of 0.86% for February, according to calculations based on regulatory filings. The HPS Corporate Lending Fund, with $26 billion in assets, declined by 0.3% for the month. These losses were the largest for both funds since 2022 and coincided with the sharpest monthly drop in the leveraged loan market since that year.

Since the start of the year, the funds have shown mixed results despite the February downturn. Blue Owl, with $35 billion in assets, recorded a loss of about 0.75% year-to-date, marking its worst start to a year since it began investing in 2021. The HPS fund delivered a 0.51% return for 2026, remaining one of the few major competitors with a positive result.

The Apollo Debt Solutions fund also posted gains since the beginning of the year, with a return of 0.39%. The February losses come amid significant outflows from direct lending funds.