Morgan Stanley Direct Lending Fund · NYSE:MSDL
Morgan Stanley Direct Lending Fund — Q1 2024 Earnings Presentation
17 slides from Morgan Stanley Direct Lending Fund's earnings presentation, May 10, 2024
Slide 1: First Quarter 2024 Earnings Presentation
First Quarter 2024 Earnings Presentation
Slide 2: Disclaimer and Forward-Looking Statement
Disclaimer and Forward-Looking Statement This presentation (the “Presentation”) has been prepared by Morgan Stanley Direct Lending Fund (together with its consolidated subsidiaries, “we,” “us,” “our,” “MSDL” or the “Company”). This Presentation is not intended to be taken by, and should not be taken
Slide 3: Disclaimer and Forward-Looking Statement (Cont'd)
Disclaimer and Forward-Looking Statement (Cont’d) Information throughout the Presentation provided by sources other than the Company (including information relating to portfolio companies) has not been independently verified and, accordingly, the Company makes no representation or warranty in respec
Slide 4: Compelling Investment Proposition
Compelling Investment Proposition Differentiated Origination and Investing Model, Complemented by Morgan Stanley (1) Defensive Portfolio With Focus on Senior Secured, First Lien & Floating Rate Loans Rigorous Investment Process & Oversight Strong Financial Performance & Conservative Financing Strate
Slide 5: Morgan Stanley Direct Lending Overview
Morgan Stanley Direct Lending Overview MSDL KEY STATISTICS (1) 9.7% 95% 100% 94% 0.75%/15% Annualized Regular Non-Cyclical Fee Structure / First Lien Investments (3) Floating Rate Loans (3)(4) Dividend Yield (2) Investments (5) Net of Waiver (6) $5.0B $1.9B 10.9% 43% 0.81x Cumulative Gross Investmen
Slide 6: Investment Strategy Built to Deliver Strong Risk-Adjusted Returns
Investment Strategy Built to Deliver Strong Risk-Adjusted Returns INVESTMENT CRITERIA Experienced mgmt. team with successful track records Market Segment U.S. Middle Market (1) Defensible, leading market positions Low technology or market risks Asset Focus First Lien, Floating Rate Diversifi
Slide 7: Quarterly Highlights
Quarterly Highlights • Net investment income per share of $0.63 in Q1’24, compared to $0.67 in Q4’23 Financial • Earnings per share was $0.59 in Q1’24, a decrease from $0.70 in Q4’23 Results • Net asset value per share was $20.67 as of Q1’24, unchanged from $20.67 as of Q4’23, despite dilution from
Slide 8: Selected Financial Highlights and Portfolio Information
Selected Financial Highlights and Portfolio Information (Dollars in thousands, except per share data) Q1'23 Q2'23 Q3'23 Q4'23 Q1’24 Net investment income per share $0.62 $0.67 $0.70 $0.67 $0.63 Net realized and unrealized gain (loss) per share(1) - $0.12 $0.32 $0.03 ($0.05) IPO offering & underwriti
Slide 9: Non-Cyclical Industries and Low Borrower Concentration
Non-Cyclical Industries and Low Borrower Concentration INDUSTRY CONCENTRATION (1) BORROWER CONCENTRATION (1)(4) Summit Buyer Health Care MRI Software 1.6% Foundation Risk Partners Professional Services Diversified Consumer Providers & Services 1.8% 1.6% 3.7% Services 4.1% Patriot Growth 3.4% High St
Slide 10: Focused on Floating Rate, First Lien Assets
Focused on Floating Rate, First Lien Assets ASSET MIX BY CAPITAL DEPLOYMENT ASSET MIX AT PERIOD END (by Gross Commitments, Dollar Amounts in Millions) (by Fair Market Value, Dollar Amounts in Millions) $243 $2,926 $2,984 $3,123 $3,194 $3,293 $232 1% 2% 2% 2% 1% 5% 4% 4% 4% 4% $195 100% 100% 100% $12
Slide 11: Credit Quality of Investments
Credit Quality of Investments • As of March 31, 2024, 98.4% of the portfolio, at fair value, had a risk rating of two or better(1) • As of March 31, 2024, three investments were on non-accrual status, representing $12.4 million, or approximately 0.4% of the portfolio, at cost Q3’23 Q4’23 Q1’24 Inter
Slide 12: Quarterly Operating Results
Quarterly Operating Results (Dollar in thousands, except per share data) Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Investment income: Interest and dividend income $82,654 $87,699 $92,682 $98,896 $97,840 Other income 985 1,195 1,769 1,859 1,261 Total investment income $83,639 $88,894 $94,451 $100,755 $99,101 Exp
Slide 13: Quarterly Balance Sheet
Quarterly Balance Sheet (Dollar in thousands, except per share data) Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Assets Investments at fair value $2,926,097 $2,983,727 $3,123,450 $3,193,561 $3,293,205 Cash 99,606 52,850 88,085 69,705 64,762 Interest receivable 22,524 23,522 26,178 28,884 29,341 Receivable for inv
Slide 14: NAV per Share Bridge For the Quarter Ended March 31, 2024
NAV per Share Bridge For the Quarter Ended March 31, 2024 $0.63 $20.67 $20.59 $20.67 ($0.50) ($0.05) ($0.08) Q4'23 NAV IPO Offering & (1) Adjusted NAV Net Investment Income Q1 Regular Realized & Unrealized Q1'24 NAV Underwriting Costs Dividend Loss (2) Notes: December 31, 2023 NAV is based on ending
Slide 15: Conservative Balance Sheet Strategy
Conservative Balance Sheet Strategy • As of March 31, 2024, the Company had total liquidity of $989 million, including cash of $65 million and undrawn committed debt capacity of $924(1)(2)(3) million Debt Commitment Principal Outstanding Available Amount Interest Rate Maturity Date BNP Funding Facil
Slide 16: Dividend History
Dividend History(1) $0.10 $0.10 $0.07 $0.18 $0.11 $0.56 $0.49 $0.48 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.45 $0.46 $0.47 $0.47 $0.43 $0.40 $0.29 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Regular Dividend Supplemental / Special Dividend Q2’20 Q3’
Slide 17: Investor Relations
Investor Relations msdl@morganstanley.com
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