Morgan Stanley Direct Lending Fund (MSDL) Q4 2024 earnings summary

Executive summary

• Achieved strong operating results in Q4 2024, with net asset value per share stable at $20.81 quarter-over-quarter.

• Net investment income was $0.57 per share in Q4 2024, down from $0.66 in Q3 2024.

• Portfolio at fair value reached $3.8 billion, diversified across 208 companies in 33 industries.

• Focused on U.S. middle market direct lending, emphasizing first lien, floating rate, and non-cyclical investments.

• Conservative financing strategy and strong liquidity position maintained.

Financial highlights

• Total investment income for Q4 2024 was $103 million, down from $110 million in Q3, mainly due to lower yields and less non-recurring income.

• Net investment income for Q4 was $50.7 million ($0.57/share), compared to $58.7 million ($0.66/share) in Q3.

• Net asset value per share was $20.81 at year-end, nearly unchanged from $20.83 in Q3.

• Q4 2024 dividends per share totaled $0.60, including a $0.50 regular and $0.10 special dividend.

• Weighted average yield at cost of debt investments was 10.4% in Q4 2024.

Outlook and guidance

• Optimistic about continued attractive risk-adjusted opportunities in direct lending, supported by a resilient economy and anticipated M&A pickup.

• Expect gradual rebound in LBO activity, with acceleration likely later in 2025 as policy visibility improves.

• Board declared a regular first quarter 2025 dividend of $0.50 per share.

• Amended share repurchase plan authorized up to $100 million for an additional twelve months.

• Truist Credit Facility maturity extended to February 2030, commitment increased to $1.45 billion, and spread lowered to 1.775%.