Morgan Stanley Direct Lending Fund Reports Strong Q1 Earnings, $233M New Investments

Morgan Stanley Direct Lending Fund (MSDL) reported strong financial results for the first quarter of 2025, generating net investment income of $0.52 per share, which exceeded the declared dividend of $0.50 per share. The fund committed approximately $233 million in new investments, contributing to its growing presence in North America and maintaining a strong pipeline despite subdued LBO activity. While MSDL's net asset value per share slightly declined to $20.65 from $20.81 in the previous quarter, the debt-to-equity ratio increased modestly from 1.08x to 1.11x. The fund's earnings per share missed some analyst expectations, reflecting a 7.14% negative earnings surprise and underperformance relative to last year's results and the broader market this year. Management attributed changes in income and expenses to lower base rates and adjustments to management fees following the expiration of fee waivers from the company’s initial public offering. The Board declared a regular dividend of $0.50 per share for the second quarter of 2025, reaffirming its commitment to shareholder returns amid a volatile market environment.