MeritValue

Morgan Stanley Direct Lending Fund

MSDLdata completeness 75%5 fiscal years on file

Data notes: no data for concept 'revenue'; no data for concept 'capex'; no data for concept 'incomeTaxExpense'; no data for concept 'pretaxIncome'

The thesis, from the filings

Morgan Stanley Direct Lending Fund earns about 9% on equity, but has diluted owners by 180% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $14.5 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue—————
Net income$83.3M1$48.5M2$231M3$215.6M3$122.1M3
Operating cash flow−$1.66B4−$429.8M5−$83.8M6−$382.5M6$150.9M6
Capital expenditure—————
Free cash flow (derived)—————
Total debt—$1.52B7$1.5B8$1.97B9$2.09B9
Cash & equivalents$74.2M10$81.2M11$69.7M12$63.4M13$81.4M13
Diluted shares31.2M61.7M74.2M88.6M87.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$200.31
your share of equity
Profit it earned you last year
$13.99
Free cash flow it threw off
—
Debt you’d be carrying
$239.11

10 shares is a claim on $200.31 of net worth that earned you $13.99 last year, against $239.11 of debt.

iii. Is this a good business?
Moat signal · return on equity
9% avg · 5y
FY21 7%FY22 3%FY23 13%FY24 12%FY25 7%

It earned an average 9% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+180% shares · 5y

Share count is up 180% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 37% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$14.5
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$122.1M
  • growthAssumed0.0%
Graham Number
$25.12
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001782524-24-000009 (NetIncomeLoss)
  2. 10-K · period ending 2022-12-31 · accession 0001782524-25-000009 (NetIncomeLoss)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-076632 (NetIncomeLoss)
  4. 10-K · period ending 2021-12-31 · accession 0001782524-24-000009 (NetCashProvidedByUsedInOperatingActivities)
  5. 10-K · period ending 2022-12-31 · accession 0001782524-25-000009 (NetCashProvidedByUsedInOperatingActivities)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-076632 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2022-12-31 · accession 0001782524-24-000009 (LongTermDebt)
  8. 10-K · period ending 2023-12-31 · accession 0001782524-25-000009 (LongTermDebt)
  9. 10-K · period ending 2024-12-31 · accession 0001193125-26-076632 (LongTermDebt)
  10. 10-K · period ending 2021-12-31 · accession 0001782524-25-000009 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  11. 10-K · period ending 2022-12-31 · accession 0001782524-24-000009 (CashAndCashEquivalentsAtCarryingValue)
  12. 10-K · period ending 2023-12-31 · accession 0001782524-25-000009 (CashAndCashEquivalentsAtCarryingValue)
  13. 10-K · period ending 2024-12-31 · accession 0001193125-26-076632 (CashAndCashEquivalentsAtCarryingValue)