MSC Income Posts $14.4 Million in Third-Quarter Net Investment Income
Key Facts
MSC Income Fund reported results on November 5 for the quarter ended September 30, 2026, recording net investment income of $14.4 million, or $0.32 per share, according to the fund's statement. Net income fell from $16.577 million, or $0.35 per share, in the third quarter of 2025, a 13% year-over-year decline. The decrease came as expenses and taxes rose, despite an increase in total investment income from the year-earlier period. Total investment income was $35.529 million, compared with $35.367 million a year earlier. The results put the decline in net income alongside limited growth in total income, as the fund continued to declare monthly and supplemental distributions to shareholders.
On an adjusted basis, net investment income was $15.3 million, or $0.34 per share, while adjusted pretax net income was $16.3 million, or $0.36 per share. By income source, interest income rose $121,000 to $30.238 million, and dividend income increased $180,000 to $3.832 million. Fee income, by contrast, fell $139,000 to $1.459 million. Total expenses after waivers rose $1.8 million, or 9.6%, to $20.1 million from $18.3 million in the year-earlier quarter. The fund said the increase in tax expenses included in net investment income was $0.6 million year over year, contributing to the decline in net income.
The fund declared regular distributions totaling $0.33 per share for the fourth quarter of 2026, at $0.11 per month for October, November and December, plus a supplemental distribution of $0.03 per share payable in December. That brought total distributions declared during the third quarter to $0.36 per share. This compares with quarterly net investment income of $0.32 per share, while adjusted income was $0.34 per share. The chief executive said the quarter's performance resulted in an annualized return on equity of 9.7%. Return on equity was 12.3% for the 12 months ended September 30, 2026.
Net asset value was $16.56 per share on September 30, up $0.05, or 0.3%, from $16.51 on June 30. It also rose $0.71, or 4.5%, from $15.85 on December 31, 2025. In its private loan portfolio, the fund invested $61.4 million during the quarter. After accounting for repayments, returns of invested capital and realized losses, the portfolio's total cost declined by a net $10.5 million. The fund recorded a realized gain of $11 million on its exit from investments in Core Transformers, a company in its private loan portfolio.
Non-accrual investments represented 1.4% of the portfolio at fair value and 5.2% at cost on September 30. The chief executive described the current portfolio as high quality, liquidity as adequate and the investment pipeline as active in discussing the quarter's performance. Total liquidity was $224.7 million at the end of September, including $27.3 million in cash and cash equivalents and $197.4 million of unused capacity under credit facilities. The statement said a net $75 million of credit capacity was reserved to repay notes maturing in October 2026. Those components show the amount of liquidity available after accounting for the specified repayment obligation.
The fund issued unsecured notes with an aggregate principal amount of $75 million, bearing interest at 6.83% and maturing on September 30, 2029. The issuance represents the first tranche of a $150 million private placement, divided into two issuances of $75 million each. Nick Messierve is set to become chief executive officer effective November 9, 2026, after serving as a managing director at Main Street since 2012. The fund scheduled a conference call to discuss results for Friday, November 6, 2026, at 11 a.m. Eastern time. It also said its quarterly Form 10-Q for the period ended September 30, 2026, was scheduled to be filed with the Securities and Exchange Commission on November 6.