Morgan Stanley Direct Lending Fund (MSDL) Q1 2025 earnings summary

Executive summary

• Net investment income for Q1 2025 was $46.2 million ($0.52 per share), down from $50.7 million ($0.57 per share) in Q4 2024, but exceeded the $0.50 dividend declared.

• NAV per share decreased to $20.65 from $20.81 sequentially.

• Portfolio fair value was $3.8 billion, invested across 210 companies in 34 industries, with a focus on U.S. middle-market, first lien, floating rate loans.

• Defensive investment strategy maintained, with significant exposure to software and insurance services and avoidance of deeply cyclical sectors.

• Share repurchase program authorized up to $100 million, with 491,332 shares repurchased in Q1 2025.

Financial highlights

• Total investment income for Q1 2025 was $101.5 million, down from $103 million in Q4 2024, but up from $99.1 million in Q1 2024.

• Net investment income was $46.2 million ($0.52 per share), compared to $50.7 million ($0.57 per share) in Q4 2024.

• Net realized and unrealized losses totaled $16.6 million, with net change in unrealized depreciation of $17.1 million.

• Debt-to-equity ratio increased to 1.11x from 1.08x sequentially.

• Weighted average yield on debt investments was 10.2% at cost and 10.3% at fair value.

Outlook and guidance

• Board declared a regular Q2 2025 dividend of $0.50 per share.

• Management expects sufficient liquidity for near-term investing activities, with $65.6 million in cash and $1.08 billion in available credit.

• M&A recovery anticipated later in 2025 or 2026, depending on market volatility and tariff clarity.

• Defensive positioning and sector selection expected to insulate the portfolio from tariff impacts.

• Forward-looking statements caution that actual results may differ due to various risks and uncertainties.