MSC Income Fund Reports $56.5M Net Increase in Assets for 2024, NYSE Listing Planned

MSC Income Fund, Inc. (MSIF) reported a net increase in net assets resulting from operations of $56.5 million for the year ended December 31, 2024, a 15% decrease compared to the $66.2 million reported in 2023. Total investment income increased by 3% to $134.8 million, driven by a 1% rise in interest income, a 4% increase in dividend income, and a substantial 68% jump in fee income. However, total expenses, net of expense waivers, also rose by 5% to $77.5 million, primarily due to higher interest expense and increased internal administrative service fees. Net investment income slightly decreased by 1% to $57.3 million.

The company's net realized gain on investments totaled $15.8 million in 2024, a significant improvement from a net realized loss of $34.0 million in 2023. This change reflects a $19.2 million gain from Private Loan portfolio full exits, partially offset by losses in the LMM and Middle Market portfolios. Net unrealized depreciation for 2024 was $15.4 million, contrasting with $46.3 million in unrealized appreciation during 2023. The income tax provision decreased from $3.8 million in 2023 to $1.1 million in 2024.

A significant development was the MSC Income Listing on the NYSE on January 29, 2025, following a follow-on public offering that raised approximately $91 million in net cash proceeds. Concurrently, the company implemented a share repurchase plan to buy back up to $65 million of its common stock over twelve months, when the market price trades below its NAV per share. The company also entered into an amended and restated investment advisory agreement, resulting in reduced management fees and incentive fees. The company also changed its investment strategy for new portfolio companies to focus solely on its Private Loan investment strategy, phasing out its LMM investment strategy over time.

As of December 31, 2024, MSIF held $1,177.5 million in investments at fair value, with cash and cash equivalents totaling $28.4 million. Total liabilities amounted to $599.8 million, resulting in a net asset value of $624.9 million, or $15.53 per share. The company had $149.0 million outstanding and $16.0 million of undrawn commitments under its Corporate Facility and $266.7 million outstanding and $33.3 million of undrawn commitments under its SPV Facility. The company also had $150.0 million outstanding in Series A Notes. The company had no employees as of December 31, 2024.

The company's outlook is contingent upon various factors, including the ability of its investment advisor to effectively manage and deploy capital, the interest rate environment, competition for investment opportunities, and the performance of its portfolio companies. The company acknowledges significant risks associated with its investment portfolio, leverage, and its reliance on key personnel. The company also notes risks related to its status as a Business Development Company (BDC) and Regulated Investment Company (RIC), including the potential for failure to meet the requirements for maintaining this tax-advantaged status.