Morgan Stanley Direct Lending Fund reported its financial results for the third quarter of 2025, revealing a total investment income of $99.7 million, a decrease from $109.8 million in the same period last year. For the nine months ending September 30, 2025, total investment income was $300.7 million, down from $313.0 million in 2024. The decline in revenue was attributed to lower interest income, which fell to $93.5 million from $105.1 million year-over-year, reflecting a decrease in the weighted average yield on investments, which dropped to 9.7% from 11.0%.

The fund's net investment income after taxes for the third quarter was $43.7 million, compared to $58.7 million in the prior year, while for the nine-month period, it was $133.6 million, down from $169.5 million. The net increase in net assets resulting from operations was $27.6 million for the quarter and $93.4 million for the year-to-date, both lower than the previous year's figures of $53.2 million and $163.9 million, respectively. The fund's net assets at the end of the quarter stood at $1.77 billion, a decrease from $1.84 billion at the end of 2024.

In terms of operational metrics, the fund's portfolio consisted of 218 companies, with 27 new investment commitments made during the quarter. The total investments at fair value were reported at $3.78 billion, slightly down from $3.79 billion at the end of 2024. The fund's debt obligations increased to $2.08 billion from $1.97 billion, with a significant portion attributed to the BNP Funding Facility and the Truist Credit Facility. The fund maintained a strong asset coverage ratio of 185% as of September 30, 2025.

Strategically, the fund has continued to focus on middle-market companies, primarily investing in senior secured term loans. The company also announced a distribution of $0.50 per share, payable in January 2026, and has been actively managing its share repurchase program, having repurchased approximately 1.7 million shares in the nine months ending September 30, 2025. Looking ahead, the fund anticipates that its investment strategy will continue to adapt to market conditions, with a focus on maintaining liquidity and managing its portfolio effectively amidst changing economic environments.

About Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund is a non-diversified, externally managed company focused on providing senior secured loans and debt financing to U.S. middle-market companies. It targets private equity-backed firms with strong cash flow, leading market positions, and high barriers to entry. The fund seeks attractive risk-adjusted returns through disciplined credit analysis, active portfolio management, and leveraging Morgan Stanley’s extensive relationships and resources.

This description was generated via AI from an annual report. Updated 9 months ago.

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