Morgan Stanley Direct Lending Fund

Welcome to Morgan Stanley's Direct Lending Funds First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks. As a reminder, this conference call is being recorded. At this time, I'd like to turn the call over to Michael Osi, Head of Investor Relations and Chief Administrative Officer. Please go ahead.

Good morning, and welcome to Morgan Stanley Direct Lending Fund's first quarter 2024 earnings call. Joining me are Jeff Levin, President and Chief Executive Officer, David Pessa, Chief Financial Officer, Arit Mizrachi, Chief Operating Officer, and Rebecca Shaul, Head of Portfolio Management. Morgan Stanley Direct Lending Fund's first quarter 2024 financial results were released yesterday after market closing can be accessed on the investor relations section of our website at www.msdl.com. We have arranged for a replay of today's event that will be accessible from the Morgan Stanley Direct Lending Fund website. During this call, I want to remind you that we may make forward-looking statements based on current expectations. The statements on this call that are not purely historical are forward-looking statements. These forward-looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including, and without limitation, market conditions, uncertainties surrounding rising interest rates, changing economic conditions, and other factors we have identified in our filings with the SEC. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions can be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained on this call are made as of the date hereof, and we assume no obligation to update the forward-looking statements or subsequent events. To obtain copies of SEC-related filings, please visit our website. With that, I will now turn the call over to Jeff Levin.

Thank you, Michael. And thank you for joining us today for Morgan Stanley Direct Lending's first quarter 2024 conference call. We are proud of the strong results that we generated during the first quarter, our first as a public company. We completed our IPO in January, and I'd like to welcome our existing and new shareholders, as well as members of the investment community who have been following the Morgan Stanley Direct Lending Fund story. I'll first begin with an overview of our first quarter 2024 results before discussing our market outlook. Dave will then provide updates on our portfolio and comments on the financial results. Our team delivered solid operating results for the first quarter, supported by continued strong credit performance. Quarter end net asset value per share was unchanged from the prior quarter, despite the dilution from the IPO and being comfortably below target leverage. We generated net investment income per share well in excess of the 50 cent per share dividend that we declared for the quarter. For the first quarter, new investment commitments totaled approximately $232 million in 30 portfolio companies. We remain confident in our ability to reestablish leverage back within our target range over the coming quarters, as previously communicated during our last earnings call. I would also highlight that we believe the quality of our origination activity remained high, and we served as the lead or joint lead arranger on about 80% of Morgan Stanley Direct Lending new platform originations during the first quarter. We believe this showcases our ever-increasing presence in the marketplace and private equity firms' preference for us as a partner. We believe sponsors want to work with us, not just because of the extensive experience of our investment team, but also due to the strategic benefits that come with partnering with Morgan Stanley and that this structure is unique in the direct lending ecosystem and will continue to differentiate us as investors. We continue to be highly focused on delivering value for our shareholders. We believe that the combination of relatively low expenses, a thoughtful fee structure, and our defensive investment strategy will help drive shareholder value. Turning now to the market outlook, we believe that the direct lending market environment remains highly attractive, providing strong risk-adjusted returns for our investors. Gross asset yields remain elevated, and credit has continued to perform well. Deal flow has been resilient and we believe is poised to accelerate. Year-to-date, we've generally witnessed a continuation of the risk-on tone that emerged in late 2023, driven by a more reassuring economic outlook and signals that the Fed may shift course. While those interest rate cuts may now be delayed, we believe the prevailing economic trends persist. The U.S. economy has been resilient throughout this inflationary environment. We think the strong performance of our middle market borrower base is an extension of that in terms of the ability to withstand elevated interest costs that are accruing to the benefit of our investors. We are not complacent about the ongoing geopolitical and macroeconomic uncertainty, but we like our defensive positioning in the market focused at the top of the capital structure in avoiding the deeply cyclicals. Regarding deal activity, we expressed confidence on our last earnings call that we will see increased deal volumes with visible green shoots in the M&A market as the year progresses. While financing volumes for new middle market leveraged buyouts remain subdued in the first quarter, pipelines are starting to build, and we remain optimistic that activity may accelerate with more visibility on the trajectory for interest rates. Private equity sponsors are sitting on record levels of dry powder, and they are motivated to put that capital to work. The fact that debt financing is abundant as well, both in terms of private debt capital, as well as due to the fact that the broadly syndicated loan markets functioning could serve as another catalyst to help jumpstart sponsor-related M&A activity. We believe our nimble lending approach to borrowers up and down the size spectrum enhances our ability to continue to capitalize on opportunities as they present themselves in the coming quarters. With that, I would like to hand the call over to David who will provide details on Morgan Stanley Direct Lending Fund's portfolio, investment activity, and financial results. Thank you, Jeff.