From Seekingalpha · · 1m 10s
Morgan Stanley Direct Lending Fund Cuts Fees
Morgan Stanley Direct Lending Fund slashes advisory fees in 2027 to boost net income as book value drops.
In brief
Morgan Stanley Direct Lending Fund slashes advisory fees in 2027 to boost net income as book value drops. Morgan Stanley Direct Lending Fund cuts advisory fees starting January 2027 to improve net investment income amid declining book value. Originally reported by Seekingalpha.
Fee Cuts Starting 2027
Morgan Stanley Direct Lending Fund slashes advisory fees in 2027 to enhance net investment income and narrow the dividend coverage gap.
Book Value Decline
MSDL's net asset value fell 3.8% to $18.76, driven by one major restructuring and rising non-accruals now at 3.4% of cost.
Market Discount
MSDL trades at a steep 27% discount to net asset value, implying the market expects significant additional credit losses beyond current marks.
Fair Value Estimate
I estimate fair value at 0.90, 0.95x net asset value ($17, $18/share); current price bakes in losses far exceeding present non-accruals.
Fee Reduction Timeline
Morgan Stanley Direct Lending Fund will pay its adviser less from January 1, with third-quarter results on November 5.
Adviser Fee Cut Impact
Lower fees aim to improve net investment income as book value takes a hit from credit losses and restructuring.
At a glance
Morgan Stanley Direct Lending Fund cuts advisory fees starting January 2027 to improve net investment income amid declining book value.
