Morgan Stanley Direct Lending Fund (MSDL) is a Business Development Company (BDC) that lends to U.S. middle-market companies. MSDL originates floating-rate, first lien senior secured term loans to private equity-backed companies — typically businesses with $15M–$200M in annual EBITDA. Borrowers use these loans to finance LBOs, acquisitions, recapitalizations, and refinancings. As of year-end 2025, MSDL held investments in 227 portfolio companies across 35 industries, with roughly 96% of the debt portfolio in first lien debt and nearly all of it floating rate. MSDL generates revenue primarily from interest income, with a weighted average yield of 9.3% on its debt portfolio. Because loans are floating rate, yield moves with benchmark rates. MSDL uses leverage — targeting a debt-to-equity ratio of 1.0–1.25x — to amplify returns on its equity base. The portfolio is concentrated in software and insurance services, and MSDL intentionally avoids cyclical or tariff-sensitive sectors. MSDL is externally managed by Morgan Stanley's private credit platform, which manages roughly $23B in committed capital across its direct lending strategy. The manager earns a base management fee plus an incentive fee with a 6% hurdle rate. As a regulated investment company, MSDL distributes at least 90% of investment income to shareholders. MSDL argues its affiliation with Morgan Stanley — covering over 400 PE firms through its investment bank — gives it a differentiated origination advantage over other BDCs and private credit funds.