Morgan Stanley Direct Lending Fund
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
MSDL$13.62-3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001782524-25-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001782524-25-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 146 previous paragraphs and 154 current paragraphs.
130 unchanged; 14 reworded; 10 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
In the table above, total investment income decreased from $104,188 for the three months ended June 30, 2024 to $99,508 for the three months ended June 30, 2025 and from $203,289 for the six months ended June 30, 2024 to $200,966 for the six months ended
Current report
(3)The 2025 Notes were redeemed on June 16, 2025.
Current report
On July 24, 2025, our Board of Directors, or the Board, appointed Michael Occi, as a director and as our Chief Executive Officer, effective July 25, 2025, to fill the vacancy on the Board and to succeed Jeffrey Levin as our chief executive officer following Mr. Levin’s resignation.
Current report
In addition, on July 24, 2025, our Board appointed Ashwin Krishnan as our Chief Investment Officer of us and appointed Orit Mizrachi and Jeffrey Day as Co-Presidents of us, all of which were effective on July 25, 2025.
Current report
Our Adviser’s investment committee, or the Investment Committee, is currently comprised of nine individuals: David N. Miller, Michael Occi, Ashwin Krishnan, Jeffrey Day, David Kulakofsky, Henry ‘Hank’ D’Alessandro, Toby Norris, Jon Spivak and Rebecca Shaoul. Messrs. Occi, and Spivak and Ms. Shaoul were appointed members of the Investment Committee in July 2025, and biographical information for Mr. Spivak and Ms. Shaoul is as follows:
Current report
Jon Spivak is a Managing Director of Morgan Stanley and a member of the Morgan Stanley Private Credit team, where he serves on the Investment Committee and focuses on originating and underwriting investment opportunities. Mr. Spivak also serves as the Portfolio Manager on various investment vehicles. Mr. Spivak joined Morgan Stanley in 2017 and has over 16 years of relevant industry experience. Prior to joining Morgan Stanley, Mr. Spivak was a Vice President at Tree Line Capital Partners where he was responsible for the origination, execution, and portfolio management of direct lending investments across a wide range of industries. Mr. Spivak also worked at Enhanced Capital Partners, an affiliate of Tree Line, where he held a similar role and served as an Investment Manager of its Small Business Investment Company. Mr. Spivak began his career at Bank of America Merrill Lynch in the Structured Equity Finance group, investing the bank’s balance sheet in various parts of the capital structure. Mr. Spivak holds a B.A. from the University of Pennsylvania and an MBA from the University of Chicago Booth School of Business.
Current report
Rebecca Shaoul is a Managing Director of Morgan Stanley and member of the Morgan Stanley Private Credit team, where she serves on the Investment Committee and as Head of Portfolio Management for the Direct Lending strategy. Ms. Shaoul joined Morgan Stanley in 2020 and has over 15 years of relevant industry experience. Prior to joining Morgan Stanley, Ms. Shaoul was a Director at Madison Capital Funding where she oversaw the underwriting, execution and portfolio management efforts for the Healthcare vertical and previously held various underwriting and execution roles focused on generalist transactions. Prior to joining Madison Capital, Ms. Shaoul held various underwriting and portfolio management roles at Wintrust Financial Corporation. Ms. Shaoul earned a B.S. in Finance from the University of Maryland.
Current report
On August 6, 2025, North Haven Private Credit CLO 1 LLC (the “Issuer”), a direct subsidiary, established pricing terms for a collateralized loan obligation (“CLO”) transaction and the notes to be issued by the Issuer.
Current report
The Issuer expects to issue approximately $401,200,000 in aggregate principal amount of notes collateralized by the assets held by the Issuer, consisting of $182,000,000 in Class A-1 Senior Secured Floating Rate Notes due 2037 and $50,000,000 in Class A-1 Senior Secured Floating Rate Loans due 2037, which will bear interest at a rate of three-month SOFR + 1.54%, $16,000,000 in Class A-2
Current report
Senior Secured Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 1.70%, $24,000,000 in Class B Senior Secured Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 1.90%, $32,000,000 in Class C Secured Deferrable Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 2.40%, and $24,000,000 in Class D Secured Deferrable Floating Rate Notes due 2037, which will bear interest at a rate of three-month SOFR + 3.55%. We will retain approximately $73,200,000 in Subordinated Notes due 2125 to be issued by the Issuer, which represent all of the Subordinated Notes of the Issuer, and will serve as Collateral Servicer to the Issuer. The CLO transaction is a form of secured financing incurred by us and is consolidated by us and subject to its overall asset coverage requirement under the Investment Company Act of 1940, as amended. The CLO transaction is anticipated to close on or about September 17, 2025.
Removed paragraphs (2)
Previous report
We have applied for a new exemptive relief order which, if granted, would supersede the Order with respect to negotiated co-investment transactions alongside certain Regulated Funds and Affiliated Funds (each as defined in the application). There can be no assurance that we will obtain such new exemptive relief from the SEC.
Previous report
On April 23, 2025, the Board adopted and approved the Second Amended and Restated Bylaws, effective as of such date, in order to remove Section 2.13, Ratification, and Section 3.14, Interested Directors.
Reworded paragraphs (14)
Previous wording
Pursuant to the exemptive relief granted by the SEC to us and our Adviser (as amended, the “Order”), we are able to enter into certain negotiated co-investment transactions alongside certain Regulated Funds and Affiliated Funds (each as defined in the Order) including any proprietary accounts of Morgan Stanley, if applicable, in a manner consistent with our investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the Order. Pursuant to the Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our eligible directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.
Current wording
Pursuant to the exemptive relief granted by the SEC to us and our Adviser on June 3, 2025 (the “Order”), we are able to enter into certain negotiated co-investment transactions alongside certain Regulated Funds (as defined in the Order) and other accounts advised by our Adviser and its affiliates, which may include proprietary accounts of Morgan Stanley, in a manner consistent with our investment objective, positions, policies, strategies, and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with the Order. The Order contains certain conditions and requires the Board to maintain oversight of our participation in the co-investment program. The Order also requires a “required majority” (as defined in Section 57(o) of the 1940 Act) of our eligible directors to make certain conclusions pursuant to Section 57(f) of the 1940 Act in connection with certain co-investment transactions, including co-investment transactions in which an affiliate of ours is an existing investor in the portfolio company, non-pro rata follow on investments and non-pro rata dispositions of investments.
Previous wording
In the table above, total investment income increased from $99,101 for the three months ended March 31, 2024 to $101,458 for the three months ended March 31, 2025. The increase was primarily driven by our deployment of capital. The size of our investment portfolio at amortized cost increased from $3,323,767 as of March 31, 2024 to $3,826,731 as of March 31, 2025. This was partially offset by a decrease in our weighted average yield at cost of 10.2% at March 31, 2025 from 11.9% at March 31, 2024, which was primarily driven by the reduction in base rates and repricing on our existing portfolio.
Current wording
June 30, 2025. The decrease was primarily driven by declining base rates and repricing on our existing portfolio which impacted our weighted average yield. Our weighted average yield at cost decreased to 10.1% as of June 30, 2025 from 11.6% as of June 30, 2024.
Previous wording
Interest and other financing expenses, including unused commitment fees, amortization of debt issuance costs, net change in unrealized (appreciation) depreciation on effective interest rate swaps and hedged items and deferred financing costs, were $34,179 and $27,260 for the three months ended March 31, 2025 and March 31, 2024 respectively. The increase was primarily due to higher average borrowings outstanding for the three months ended March 31, 2025. For the three months ended March 31, 2025 and March 31, 2024, average borrowings outstanding were $2,030,967 and $1,462,796 respectively.
Current wording
Interest and other financing expenses, including unused commitment fees, amortization of debt issuance costs, net change in unrealized (appreciation) depreciation on effective interest rate swaps and hedged items and deferred financing costs, increased to $34,707 for the three months ended June 30, 2025 from $29,302 for the three months ended June 30, 2024 and to $68,886 for the six months ended June 30, 2025 from $56,562 for the six months ended June 30, 2024. The increase was primarily due to higher average borrowings outstanding for the three and six months ended June 30, 2025. For the three months ended June 30, 2025 and June 30, 2024, average borrowings outstanding were $2,046,092 and $1,578,492 respectively, which were offset by the reduction of our average interest rate which decreased from 6.57% to 6.02%, for the three months ended June 30, 2024 and June 30, 2025 respectively. For the six months ended June 30, 2025 and June 30, 2024, average borrowings outstanding were $2,038,571 and $1,520,644 respectively, which was offset by the reduction of our average interest rate which decreased from 6.63% to 6.06%, for the six months ended June 30, 2024 and June 30, 2025 respectively.
Previous wording
Base management fees, net of waiver, were $8,977 and $5,132 for the three months ended March 31, 2025 and March 31, 2024, respectively. The increase was primarily due to an increase in average gross assets as well as the duration of the management fee waiver which expired on January 24, 2025.
Current wording
Base management fees, net of waiver, were $9,624 and $18,601 for the three and six months ended June 30, 2025 and $6,479 and $11,612 for the three and six months ended June 30, 2024, respectively. The increase was primarily due to an increase in average gross assets. In addition, the management fee waiver expired on January 24, 2025
Previous wording
The incentive fee consists of two components: (1) income based incentive fee and (2) capital gains incentive fee. The income based incentive fees, net of waiver, were $9,468 and $10,126 for the three months ended March 31, 2025 and March 31, 2024, respectively.
Current wording
The incentive fee consists of two components: (1) income based incentive fee and (2) capital gains incentive fee. The income based incentive fees, net of waiver, were $9,279 and $18,747 for the three and six months ended June 30, 2025 and $9,903 and $20,028 for the three and six months ended June 30, 2024, respectively. In addition, the incentive fee waiver expired on January 24, 2025.
Previous wording
For the three months ended March 31, 2025, net realized gains on our investments was $562 which was primarily due to the sale/repayment on certain equity positions offset by the restructuring of one of our portfolio companies. For the three months ended March 31, 2024, net realized losses on our investments was $5,625, which was primarily due to the restructuring of three portfolio companies.
Current wording
For the three and six months ended June 30, 2025, net realized gains were $91 and $640, respectively. For the three months ended June 30, 2024, net realized gains on our investments were $108. For the six months ended June 30, 2024, net realized losses on our investments were $5,517, which was primarily due to the restructuring of three portfolio companies.
Previous wording
For the three months ended March 31, 2025, net change in unrealized depreciation on our investments of $17,106 was primarily the result of the changes in spreads in the secondary markets as well as financial performance in certain portfolio companies. For the three months ended March 31, 2024, net change in unrealized appreciation on our investments of $2,658 was primarily driven by changes in spreads in the primary and secondary markets.
Current wording
For the three months and six months ended June 30, 2025, net change in unrealized depreciation on our investments of $7,753 and $24,859, respectively, was primarily the result of the changes in spreads in the secondary markets as well as financial performance in certain portfolio companies. For the three and six months ended June 30, 2024, net change in unrealized appreciation on our investments of $2,816 and $5,474 was primarily driven by changes in spreads in the primary and secondary markets.
Previous wording
As of March 31, 2025, we had approximately $65.6 million of unrestricted cash and cash equivalents, which taken together with our approximately $284.0 million and $800.1 million of availability under the BNP Funding Facility and the Truist Credit Facility (subject to borrowing base availability) (each as defined in Note 6. “Debt” in the notes to the accompanying consolidated financial statements), respectively, we expect to be sufficient for our investing activities and sufficient to conduct our operations in the near term. As of March 31, 2025, we believed we had adequate financial resources to satisfy unfunded portfolio company commitments of $584.9 million.
Current wording
As of June 30, 2025, we had approximately $75.8 million of unrestricted cash, cash equivalents, and short term investments (including investments in money market funds), which taken together with our approximately $284.0 million and $829.0 million of availability under the BNP Funding Facility and the Truist Credit Facility (subject to borrowing base availability) (each as defined in Note 6. “Debt” in the notes to the accompanying consolidated financial statements), respectively, we expect to be sufficient for our investing activities and sufficient to conduct our operations in the near term. As of June 30, 2025, we believed we had adequate financial resources to satisfy unfunded portfolio company commitments of $549.1 million.
Previous wording
For the three months ended March 31, 2025 and March 31, 2024, there were no shares issued through ATM offerings.
Current wording
For the three and six months ended June 30, 2025 and June 30, 2024, there were no shares issued through ATM offerings.
Previous wording
The following table summarizes our distributions declared and payable for the three months ended March 31, 2025 and March 31, 2024, respectively:
Current wording
The following table summarizes our distributions declared and payable for the six months ended June 30, 2025 and June 30, 2024, respectively:
Previous wording
The following table summarizes the shares repurchased under our 10b5-1 Plan during the three months ended March 31, 2025:
Current wording
The following table summarizes the shares repurchased under our 10b5-1 Plan during the six months ended June 30, 2025:
Previous wording
No shares were repurchased under our Original Company 10b5-1 Plan during the three months ended March 31, 2024.
Current wording
No shares were repurchased under our Original Company 10b5-1 Plan during the six months ended June 30, 2024.
Previous wording
(1)As of March 31, 2025 and December 31, 2024, a letter of credit of $2,275 and $1,828, respectively, was outstanding, which reduced the unused availability under the Truist Credit Facility by the same amount. Under the Truist Credit Facility, the Company may borrow in U.S. dollars or certain other permitted currencies. As of March 31, 2025 and December 31, 2024, the Company had borrowings denominated in Euros (EUR) of 3,298 and 3,298, respectively, Canadian dollars (CAD) of 300 and 300, respectively and Pound Sterling (GBP) of 1,020 and 1,020, respectively.
Current wording
(1)As of June 30, 2025 and December 31, 2024, a letter of credit of $7,775 and $1,828, respectively, was outstanding, which reduced the unused availability under the Truist Credit Facility by the same amount. Under the Truist Credit Facility, the Company may borrow in U.S. dollars or certain other permitted currencies. As of June 30, 2025 and December 31, 2024, the Company had borrowings denominated in Euros (EUR) of 3,298 and 3,298, respectively, Canadian dollars (CAD) of 3,300 and 300, respectively and Pound Sterling (GBP) of 1,020 and 1,020, respectively.
Previous wording
(2)As of March 31, 2025, the carrying value of the Company’s 2027 Notes, 2025 Notes and 2029 Notes were presented net of unamortized debt issuance costs of $2,097, $555 and $2,982 and unamortized original issuance discount of $399, $0 and $3,207, respectively. As of December 31, 2024, the carrying value of the Company’s 2027 Notes, 2025 Notes and 2029 Notes were presented net of unamortized debt issuance costs of $2,374, $856 $3,297, and unamortized original issuance discount of $452, $0 and $3,398, respectively.
Current wording
(2)As of June 30, 2025, the carrying value of the Company’s 2027 Notes, 2025 Notes, 2029 Notes and 2030 Notes were presented net of unamortized debt issuance costs of $1,822, $0, $2,775 and $4,176 and unamortized original issuance discount of $346, $0, $3,013 and $3,664, respectively. As of December 31, 2024, the carrying value of the Company’s 2027 Notes, 2025 Notes, 2029 Notes and 2030 Notes were presented net of unamortized debt issuance costs of $2,374, $856 $3,297 and $0 and unamortized original issuance discount of $452, $0, $3,398 and $0, respectively.