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Morgan Stanley Direct Lending Has Some Issues, But The Pr...
Cash Flow Venue · 2026-04-11 · via All Articles on Seeking Alpha

Summary

  • Morgan Stanley Direct Lending Fund is upgraded from hold to buy due to an unusually attractive valuation despite portfolio concerns.
  • MSDL trades at a 30% discount to NAV, offering a compelling entry point versus peers like BXSL with a smaller discount.
  • Risks include rising underperforming assets, declining interest income, and a dividend not fully covered by net investment income.
  • MSDL's defensive, first-lien-focused portfolio and nuanced software exposure provide some offsetting strengths, supporting expectations for double-digit total returns.
Złota skala sprawiedliwości ze starożytnymi filarami w tle.

george tsartsianidis/iStock via Getty Images

Today, I'm writing about Morgan Stanley Direct Lending (MSDL). I won't hide the fact that I have a long position in MSDL, and I bought at much higher prices. Obviously, my buys weren't successful. So far, at least. I put MSDL on a

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSDL, ARCC, BXSL, MU, TSLX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information, opinions, and thoughts included in this article do not constitute an investment recommendation or any form of investment advice.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.