Returns on direct lending loans, as measured by the Cliffwater Direct Lending Index (CDLI) have diverged from their long-term trend and lagged the Morningstar LSTA Leveraged Loan Index (LLI) this year. This dynamic had played out as broadly syndicated institutional loans rallied from the sharp drop in the secondary market last year when their total return was negative (-0.77%) for only the second time post-Global Financial Crisis. Annual returns on the CDLI have been negative only once (2008) and were 6.29% in 2022.