Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes, aiming for sustainable portfolio income, diversification, and inflation hedging [1][2] Group 1: Investment Strategy - The investment strategy emphasizes high-yield, dividend growth opportunities, targeting dividend yields up to 10% [2] - The service provides research on various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions [2] Group 2: Experience and Expertise - The team has over 14 years of investment experience and an MBA in Finance, focusing on defensive stocks with a medium- to long-term horizon [2] - The group aims to help investors achieve dependable monthly income and portfolio diversification [2]

Core Insights - Morgan Stanley Direct Lending Fund (MSDL) reported quarterly earnings of $0.5 per share, exceeding the Zacks Consensus Estimate of $0.49 per share, but down from $0.66 per share a year ago, indicating an earnings surprise of +2.04% [1] - The company posted revenues of $99.72 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.70%, but down from $109.75 million year-over-year [2] - The stock has underperformed the market, losing about 18.4% since the beginning of the year compared to the S&P 500's gain of 15.6% [3] Earnings Outlook - The future performance of Morgan Stanley Direct Lending Fund will largely depend on management's commentary during the earnings call and the earnings outlook for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.50 on revenues of $97 million, and for the current fiscal year, it is $2.01 on revenues of $395.06 million [7] Industry Context - The Financial - SBIC & Commercial Industry, to which Morgan Stanley Direct Lending Fund belongs, is currently ranked in the bottom 23% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact the stock's performance [5] Estimate Revisions - Prior to the earnings release, the estimate revisions trend for Morgan Stanley Direct Lending Fund was unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6]

Financial Performance - For the quarter ended September 30, 2025, net investment income was $43.7 million, or $0.50 per share, consistent with the previous quarter [7]. - Total investment income for the quarter was $99.7 million, slightly up from $99.5 million in the prior quarter [6]. - Total investment income for the three months ended September 30, 2025, was $99.722 million, a decrease of 9.3% from $109.752 million in the same period of 2024 [25]. - Net investment income after taxes for the three months ended September 30, 2025, was $43.730 million, down 25.5% from $58.729 million in the prior year [25]. - Earnings per share (basic and diluted) for the three months ended September 30, 2025, was $0.32, down from $0.60 in the same period of 2024, representing a decline of 46.7% [25]. - Net investment income per share (basic and diluted) for the three months ended September 30, 2025, was $0.50, down from $0.66 in the same period of 2024, indicating a decline of 24.2% [25]. Asset and Investment Details - The net asset value per share decreased to $20.41 from $20.59 as of June 30, 2025 [9]. - The investment portfolio had a fair value of approximately $3.8 billion, comprised of 218 portfolio companies across 33 industries [11]. - New investment commitments totaled $183.0 million, with fundings of $198.0 million and repayments of $199.9 million, resulting in a net funded deployment of ($1.9) million [9]. - The Company successfully priced and closed its inaugural CLO with approximately $401 million of aggregate principal [9]. Expenses and Financial Ratios - Total expenses for the three months ended September 30, 2025, increased to $55.590 million, compared to $54.477 million in the same period of 2024, reflecting a rise of 2.0% [25]. - The debt-to-equity ratio increased to 1.17x from 1.15x in the previous quarter [9]. - The combined weighted average interest rate on debt outstanding was 5.85% for the quarter [13]. - Management fees for the three months ended September 30, 2025, were $9.628 million, an increase from $9.100 million in the same period of 2024, reflecting a rise of 5.8% [25]. Unrealized Gains and Losses - Net realized gain on non-controlled/non-affiliated investments for the three months ended September 30, 2025, was $22,000, compared to a loss of $10.965 million in the same period of 2024 [25]. - Net change in unrealized depreciation on non-controlled/non-affiliated investments for the three months ended September 30, 2025, was $(15.909) million, contrasting with an appreciation of $5.442 million in the prior year [25]. Shareholder Information - The Company declared a regular dividend of $0.50 per share, payable to shareholders of record as of September 30, 2025 [9]. - Weighted average shares outstanding for the three months ended September 30, 2025, was 86,844,648, compared to 89,264,686 in the same period of 2024 [25]. - Net increase in net assets resulting from operations for the three months ended September 30, 2025, was $27.601 million, a decrease of 48.2% from $53.206 million in the prior year [25].

Company Overview - The company is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies, regulated as a BDC under the Investment Company Act of 1940[359]. - The company is not a subsidiary of Morgan Stanley and has no obligation for financial support from Morgan Stanley[359]. - The company aims to maintain its qualification as a BDC and as a regulated investment company under the Internal Revenue Code[367]. Investment Strategy - The investment objective is to achieve attractive risk-adjusted returns primarily through current income from senior secured term loans issued by U.S. middle-market companies, typically generating annual EBITDA between $15 million and $200 million[360]. - Revenue is primarily generated from interest income on debt investments, with additional income from dividends, capital gains, and various fees, reflecting a focus on directly originated senior secured term loans[362][365]. - The company expects its debt investments to have a stated term of five to eight years, typically bearing interest at a floating rate based on benchmarks like SOFR[361]. - The level of investment activity can vary significantly based on factors such as available debt for middle-market companies and the general economic environment[364]. Financial Performance - Total investment income for Q3 2025 was $99,722, a decrease of 9.4% from $109,752 in Q3 2024[383]. - Net investment income after taxes for Q3 2025 was $43,730, down 25.5% from $58,729 in Q3 2024[383]. - The total portfolio value as of September 30, 2025, was $3,837,722, an increase from $3,662,618 at the end of Q3 2024[377]. - The weighted average yield on debt and income-producing investments at cost was 9.7% as of September 30, 2025, compared to 10.4% at the end of 2024[377]. - New investment commitments in portfolio companies totaled $183,049 for Q3 2025, significantly lower than $455,365 in Q3 2024[377]. - Total investment income decreased from $109,752 to $99,722 for the three months ended September 30, 2025, and from $313,041 to $300,690 for the nine months ended September 30, 2025, primarily due to declining base rates and repricing on the existing portfolio[385]. - Weighted average yield at cost decreased to 9.7% as of September 30, 2025, from 11.0% as of September 30, 2024[385]. Portfolio and Investment Metrics - The number of portfolio companies increased to 218 as of September 30, 2025, from 208 at the end of 2024[377]. - The average position size of investments decreased to $17.3 million as of September 30, 2025, from $18.2 million at the end of 2024[377]. - The percentage of debt investments with one or more financial covenants was 59.1% as of September 30, 2025, down from 64.6% at the end of 2024[377]. - The percentage of performing debt bearing a floating rate at fair value remained stable at 99.6% as of September 30, 2025[377]. - Approximately 99.6% of the Company's debt investments were at floating rates as of September 30, 2025[422]. Expenses and Liabilities - Operating expenses include investment advisory fees, administrative costs, and other operational expenses, with expectations for general and administrative expenses to remain stable or decline during asset growth periods[367][368]. - Interest and other financing expenses increased to $33,903 for the three months ended September 30, 2025, from $33,153 for the same period in 2024, and to $102,788 for the nine months ended September 30, 2025, from $89,715 in 2024[388]. - Average borrowings outstanding increased to $2,021,437 for the three months ended September 30, 2025, compared to $1,799,879 for the same period in 2024[388]. - As of September 30, 2025, the total outstanding debt obligations were $3,484,000, with $2,078,120 outstanding and $1,396,105 unused[408]. Shareholder Returns and Distributions - Total distributions declared for the nine months ended September 30, 2025, amounted to $1.50 per share, compared to $1.60 per share for the same period in 2024[402]. - The Company declared a distribution of $0.50 per share on November 4, 2025, payable on or around January 23, 2026[412]. - The company entered into a share repurchase plan to acquire up to $100 million of its Common Stock at prices below its net asset value per share[404]. - Total shares repurchased under the Original Company 10b5-1 Plan from January 1 to September 30, 2025, amounted to 1,699,876 shares[405]. - The average price paid per share for repurchases in March 2025 was $20.38, with a total of 459,142 shares purchased[405]. IPO and Management Fees - The company closed its IPO on January 26, 2024, issuing 5,000,000 shares at a public offering price of $20.67 per share, resulting in net cash proceeds of approximately $97.1 million[396]. - The management fee waiver expired on January 24, 2025, leading to an increase in base management fees to $9,628 for the three months ended September 30, 2025, from $6,825 in 2024[389]. Market Sensitivity - A hypothetical increase of 300 basis points in interest rates would result in a net income increase of $72,523,000[422]. - The net realized gain for Q3 2025 was $26, compared to a loss of $10,965 in Q3 2024[383]. - Net realized gains were $26 and $666 for the three and nine months ended September 30, 2025, respectively, compared to net realized losses of $10,965 and $16,482 for the same periods in 2024[392].

Core Viewpoint - The private credit industry is viewed with skepticism due to the perception that many of their loans carry higher risks than they appear, and investment vehicles associated with private credit are often trading significantly above their net asset value (NAV) [1]. Group 1 - The private credit industry is considered risky, with loans that may not be as secure as they seem [1]. - Investment vehicles linked to private credit are trading at prices that exceed their NAV, indicating potential overvaluation [1].

Core Viewpoint - Morgan Stanley Direct Lending Fund (NYSE:MSDL) is a business development company that provides financing solutions to middle-market companies, playing a crucial role in capital provision where traditional bank financing may not be accessible [1] Price Target Trends - The consensus price target for MSDL has shown a slight upward trend over the past year, with the average price target increasing to $18.33 last month, indicating positive sentiment among analysts [2] - The average price target was $17.83 in the last quarter, reflecting a $0.50 increase compared to the previous month, showcasing growing confidence in MSDL's performance [3][4] - Wells Fargo has set a price target of $17, reflecting current market concerns, which contrasts with the overall positive sentiment [2] Financial Performance and Challenges - Despite the positive price target trends, MSDL faces challenges such as a decline in earnings and an increase in non-performing loans, which could impact future price targets [3][4] - The company is exposed to high floating-rate risks, which may signal a potential dividend cut [4] Earnings Reports and Market Conditions - Investors are advised to monitor MSDL's quarterly earnings reports, as these can significantly influence analysts' price targets, with positive surprises potentially leading to upward revisions [5][6] - The current economic climate, characterized by persistent inflation and a weakening labor market, adds uncertainty to MSDL's outlook [5][6]

Core Viewpoint - Morgan Stanley Direct Lending Fund (MSDL) is set to release its financial results for Q3 2025 on November 6, 2025, after market close, indicating a scheduled transparency in financial performance [1] Financial Results Announcement - MSDL will announce its financial results for the quarter ended September 30, 2025 [1] - The announcement is scheduled for November 6, 2025, after the market closes [1] - A conference call will be held on November 7, 2025, at 10:00 am ET to review the financial results and engage in a Q&A session [1]

Group 1 - Business Development Companies (BDCs) are financial vehicles that aim to source capital at low costs and lend it at higher yields to businesses that cannot access traditional banking services [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, focusing on helping corporates with financial strategies and large-scale financings [2] - He has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [2] - His work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [2]

Core Insights - Morgan Stanley Direct Lending (NYSE: MSDL) has experienced a stock price decline of approximately 20% year-to-date, impacting shareholder sentiment [1]. Company Overview - The company focuses on dividend investing as a strategy for financial growth, emphasizing its accessibility for achieving financial freedom [1]. - The analyst has extensive experience in mergers and acquisitions (M&A) and business valuation, which informs their investment decisions and insights [1]. Investment Strategy - The analyst advocates for dividend investing as a straightforward method for building long-term wealth, aiming to share knowledge and facilitate a collective journey towards financial freedom [1].

Core Insights - The article highlights the early identification and coverage of Morgan Stanley Direct Lending Fund (NYSE: MSDL) by an analyst since its IPO entry into the market [1] Company Overview - Morgan Stanley Direct Lending Fund is a Business Development Company (BDC) that has been actively covered since its inception in the IPO market [1] Analyst Background - The analyst has extensive experience in financial management, aiding top-tier corporates in shaping financial strategies and executing large-scale financings [2] - The analyst has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [2] - The analyst holds a CFA Charter and an ESG investing certificate, with experience in thought-leadership activities to support capital market development [2]