Company Overview - Rubicon Associates is led by a Chartered Financial Analyst with over 20 years of experience in investment management, focusing on fixed income and preferred stock portfolios, as well as asset allocation and macro portfolios [1] - The principal has managed nearly seven billion dollars in credit investments and oversaw research and trading activities in the credit market [1] - The firm has also managed a short-duration fund worth $20 billion and served as Chief Strategist at a wealth management firm [1] Investment Focus - Rubicon Associates has experience analyzing and investing in both public and private companies globally [1] - The firm provides advisory services to institutional clients on fixed income strategies, manager selection, and asset allocation [1] - Rubicon Associates has contributed articles to platforms such as Seeking Alpha, Learn Bonds, and TheStreet.com, in addition to advising both institutional and private investors [1]

Group 1 - Morgan Stanley Direct Lending Fund (MSDL) is recognized in discussions among durable BDC dividend investors regarding sector approaches [1] - Roberts Berzins has over a decade of experience in financial management, aiding top-tier corporates in financial strategy and large-scale financings [1] - Berzins has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] Group 2 - Berzins has been involved in developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [1] - He holds a CFA Charter and an ESG investing certificate, and has interned at the Chicago Board of Trade [1] - Berzins actively participates in thought-leadership activities to support the development of pan-Baltic capital markets [1]

Financial Performance - For the quarter ended December 31, 2025, net investment income was $42.4 million, or $0.49 per share, compared to $43.7 million, or $0.50 per share for the previous quarter[7]. - Total investment income for the quarter was $96.6 million, down from $99.7 million in the prior quarter, primarily due to lower base rates[6]. - Total investment income for the year ended December 31, 2025, was $397,287, a decrease of 4.0% from $416,075 in 2024[29]. - Net investment income after taxes decreased to $176,026 in 2025 from $220,235 in 2024, representing a decline of 20.0%[29]. - Earnings per share (basic and diluted) dropped to $1.40 in 2025 from $2.43 in 2024, a decrease of 42.4%[29]. - Interest income from non-controlled/non-affiliated investments was $371,811 in 2025, down from $396,421 in 2024, a decline of 6.2%[29]. Expenses and Costs - Total net expenses for the quarter were $54.2 million, down from $56.0 million in the prior quarter, mainly due to a reduction in incentive fees[9]. - Total expenses increased to $219,463 in 2025, up 4.0% from $209,374 in 2024[29]. - Management fees increased to $38,466 in 2025, up from $35,415 in 2024, an increase of 5.8%[29]. Asset and Investment Metrics - The net asset value per share decreased to $20.26 from $20.41 as of September 30, 2025[5]. - As of December 31, 2025, total investments at fair value were approximately $3.8 billion, with a debt-to-equity ratio of 1.20x, up from 1.17x in the previous quarter[5][14]. - The weighted average interest rate on debt outstanding was 5.61% for the quarter[14]. - As of December 31, 2025, the Company had $1.38 billion available under its credit facilities and $90.6 million in unrestricted cash[14]. Investment Activities - New investment commitments totaled $146.5 million, with fundings of $163.8 million and repayments of $162.6 million, resulting in a net funded deployment of $1.2 million[7]. - The Company launched Capstone Lending LLC, a joint venture with a total capital commitment of $250 million, with approximately 47% of commitments called as of February 2026[18]. Unrealized Gains and Losses - Net realized and unrealized loss for the year was $53,932, compared to a loss of $4,671 in 2024[29]. - The net increase in net assets resulting from operations was $122,094 in 2025, down from $215,564 in 2024, a decrease of 43.3%[29]. - The net change in unrealized appreciation on non-controlled/non-affiliated investments was a loss of $46,138 in 2025, compared to a gain of $11,904 in 2024[29].

Investment Strategy and Risk Management - Morgan Stanley's investment adviser rates portfolio investments quarterly, with enhanced scrutiny for ratings of 3 or 4, conducting monthly reviews[76]. - The investment team analyzes market conditions to assess potential exposure, considering factors like capital market volatility and economic uncertainty[77]. - Risk Rating 1 investments are performing above expectations, while Risk Rating 4 investments indicate substantial risk and potential loss of initial cost basis[81]. - The adviser may receive fees for origination activities, which could lead to riskier behavior when acting on behalf of the company[89]. - The company may invest alongside affiliated accounts, but conflicts of interest could affect decision-making in troubled situations[88]. - The investment adviser is required to maintain oversight of co-investment transactions, ensuring compliance with regulatory requirements[82]. - The allocation committee, comprised of senior management, approves final allocations based on various factors including investment guidelines and risk considerations[92]. Regulatory Compliance and Governance - The SEC granted an exemptive relief order allowing co-investment with affiliated accounts, which may include proprietary accounts of Morgan Stanley[90]. - Allocation policies are in place to ensure fair access to investment opportunities among affiliated accounts, but conflicts of interest may arise[85]. - The investment advisory agreement was most recently re-approved in August 2025, continuing from year to year upon approval[108]. - The company is subject to comprehensive supervision and regulation by the Federal Reserve due to its status as a bank holding company[177]. - The Sarbanes-Oxley Act requires the company to review its policies and procedures to ensure compliance with regulatory requirements[176]. - The company must adopt written policies to prevent violations of federal securities laws and designate a chief compliance officer for administration[175]. - Morgan Stanley and its affiliates are subject to the Volcker Rule, which restricts proprietary trading and investments in covered funds, impacting operations as a banking entity[182]. - Morgan Stanley controls the company due to owning 5% or more of its voting securities, which may impose operational restrictions under the Volcker Rule[183]. - The company intends to operate without violating U.S. banking laws, but future changes to the Volcker Rule could restrict operations[184]. Financial Performance and Incentive Fees - The base management fee is set at an annual rate of 1.0% of average gross assets, with a waiver reducing it to 0.75% for the period from January 24, 2024, to January 24, 2025[110]. - The incentive fee structure includes a hurdle rate of 1.5% per quarter (6.0% annualized) for pre-incentive fee net investment income[117]. - For the first quarter, the aggregate pre-incentive fee net investment income was $45.0 million, with a hurdle amount of $27.0 million, resulting in an excess income amount of $18.0 million[129]. - The catch-up fee amount for the first quarter was calculated at $5.727 million, leading to a total income incentive fee payment of $7.875 million[130]. - In the second quarter, the aggregate pre-incentive fee net investment income increased to $90.0 million, with a hurdle amount of $54.0 million, resulting in an excess income amount of $36.0 million[131]. - The total income incentive fee payment for the second quarter was $15.750 million, after accounting for previously paid fees[131]. - For the third quarter, the aggregate pre-incentive fee net investment income reached $135.0 million, with a hurdle amount of $81.0 million, leading to an excess income amount of $54.0 million[132]. - The total income incentive fee payment for the third quarter was $23.625 million[132]. - The company has a stable NAV of $1.8 billion across all quarters, with a hurdle rate of 1.5% applied to calculate incentive fees[134]. Shareholder Distributions and RIC Compliance - The company has authorized a share repurchase program to acquire up to $100 million of its Common Stock at prices below its net asset value per share[99]. - The company must comply with asset coverage ratios to make distributions or repurchase shares while indebtedness remains outstanding[98]. - The company has adopted an "opt out" dividend reinvestment plan effective January 26, 2024, allowing stockholders to reinvest dividends in additional shares of Common Stock[101]. - The company must ensure that qualifying assets represent at least 70% of its total assets when acquiring new assets, as per the 1940 Act[156]. - The company has elected to be treated as a RIC, which allows it to avoid corporate-level U.S. federal income taxes on distributed net ordinary income and capital gains[194]. - To maintain RIC status, the company must distribute at least 90% of its investment company taxable income (ICTI) as dividends[194]. - The company must meet specific income and asset diversification requirements to qualify as a RIC, including deriving at least 90% of gross income from permitted sources[203]. - The company may incur a 4% nondeductible federal excise tax if it fails to meet the required distributions under the Excise Tax Avoidance Requirement[199]. - The company is limited in its ability to deduct expenses exceeding its ICTI, which may lead to taxable income that must be distributed to stockholders[200]. Market Conditions and Investment Risks - The company faces strong competition from various financing sources, which may limit investment opportunities and affect pricing[94]. - The company may benefit from rising market interest rates by investing in higher-return debt instruments, potentially increasing pre-incentive fee net investment income[122]. - The market value of securities may fluctuate due to various risks, including economic instability and health crises, impacting the company's investments and net asset value[558]. - Approximately 99.6% of the company's debt investments were at floating rates as of December 31, 2025, with significant impacts on net income from interest rate changes[560]. - A hypothetical increase of 300 basis points in interest rates could result in a net income of $71,409,000, while a decrease of 300 basis points could lead to a net loss of $67,872,000[560]. - The company may hedge against interest rate fluctuations using standard hedging instruments, but this could limit participation in benefits from lower interest rates[561]. - Investments in non-U.S. securities may incur foreign taxes, reducing overall yield for stockholders[208]. - The company may face financial difficulties requiring restructuring of investments, potentially leading to capital losses and non-cash income[207]. - Certain income and fees recognized may not satisfy the 90% Income Test, potentially impacting the company's qualification as a RIC[210]. - The company may invest in below investment grade instruments, which could complicate U.S. federal income tax treatment and affect distributions[211].

Company Overview - Rubicon Associates is led by a Chartered Financial Analyst with over 20 years of experience in investment management, focusing on fixed income and preferred stock portfolios, as well as asset allocation and macro portfolios [1] - The principal has managed nearly $7 billion in credit investments and oversaw research and trading activities in the credit market, including a $20 billion short-duration fund [1] Investment Strategy - The firm has experience analyzing and investing in both public and private companies globally, advising institutional clients on fixed income strategies, manager selection, and asset allocation [1] - Rubicon Associates has contributed written content for platforms such as Seeking Alpha, Learn Bonds, and TheStreet.com, in addition to advising both institutional and private investors [1]

Core Insights - The article highlights the extensive experience of Roberts Berzins in financial management, particularly in shaping financial strategies for top-tier corporates and executing large-scale financings [1] - It emphasizes Berzins' contributions to institutionalizing the REIT framework in Latvia, aimed at enhancing the liquidity of pan-Baltic capital markets [1] - The article also notes Berzins' involvement in developing national SOE financing guidelines and frameworks to channel private capital into affordable housing [1] Group 1 - Roberts Berzins has over a decade of experience in financial management [1] - He has significantly contributed to the institutionalization of the REIT framework in Latvia [1] - Berzins is a CFA Charterholder and holds an ESG investing certificate [1] Group 2 - He has worked on developing national SOE financing guidelines [1] - Berzins is actively involved in initiatives to support the development of pan-Baltic capital markets [1] - His experience includes an internship at the Chicago Board of Trade [1]

Group 1 - Jed Finn, Head of Wealth Management at Morgan Stanley, will speak at the UBS Financial Services Conference on February 10, 2026, at 3:30 p.m. (ET) [1] - Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, wealth management, and investment management services, with offices in 42 countries [1] - Morgan Stanley Direct Lending Fund (NYSE: MSDL) will release its financial results for the fourth quarter and fiscal year ended December 31, 2025, on February 26, 2026, after market close [1] Group 2 - Morgan Stanley has been ranked the 1 Outsourced Chief Investment Officer (OCIO) provider in the United States with $246.9 billion in U.S. OCIO AUM, according to Chestnut Solutions Institute's inaugural OCIO Market Leader Awards [1] - The distinction recognizes Morgan Stanley's industry-leading scale, capabilities, and commitment to delivering high-quality investment solutions to institutional clients [1] - The accompanying report from the Institute indicates an increase in OCIO AUM in 2025 [1]

Core Insights - Morgan Stanley Direct Lending Fund (MSDL) has shown significant interest among investors in recent quarters, maintaining a bullish outlook on its performance [1] Company Overview - MSDL is categorized as a Business Development Company (BDC), which focuses on providing capital to small and mid-sized businesses [1] Investment Strategy - The emphasis on dividend investing is highlighted as a key strategy for achieving financial freedom, with MSDL being a notable example in this context [1] - The author combines financial expertise with value investing principles to build a robust investment portfolio centered around dividend income [1] Sector Focus - The investment focus spans various sectors including technology, real estate, software, finance, and consumer staples, which are also reflected in the author's personal investment portfolio [1]

Group 1 - Business development companies are currently facing challenges, leading to significant discounts in their net asset value (NAV) valuations [1] - The Morgan Stanley Direct Lending Fund (MSDL) is noted to be trading at one of the deepest discounts among its peers [1] - A hybrid investment strategy combining classic dividend growth stocks with business development companies, REITs, and closed-end funds is suggested as an effective way to enhance investment income while achieving total returns comparable to traditional index funds like the S&P [1]

Group 1 - Private credit pools, also known as BDCs, are identified as suitable income vehicles for investors seeking high dividends and NAV appreciation potential [1] Group 2 - The retail investment landscape is increasingly focused on AI-driven companies, with a strong emphasis on achieving financial independence through strategic investments [2] - The ongoing transformation of industries by artificial intelligence is creating new investment opportunities, particularly in leading AI-related companies like NVIDIA [2] - The next decade is anticipated to present remarkable opportunities for both retail and institutional investors in the AI sector [2]