Truffle Hound Capital Closes Out Its Entire Private Credit Sleeve

On May 7, 2026, Truffle Hound Capital, LLC sold out its entire stake in Morgan Stanley Direct Lending Fund (NYSE:MSDL), with an estimated transaction value of $4.95 million based on quarterly average pricing.

• Sold 320,000 shares, with an estimated trade value of $4.95 million based on average pricing for the quarter
• Quarter-end position value decreased by $5.27 million, reflecting both trading activity and stock price changes
• Transaction value represented 1.28% of the fund’s 13F assets under management
• Post-trade, the fund reports zero shares and no remaining position in MSDL
• The position had accounted for 1.4% of AUM as of the prior quarter, signaling a full exit from a previously notable holding

What happened

According to a SEC filing dated May 7, 2026, Truffle Hound Capital, LLC fully liquidated its position in Morgan Stanley Direct Lending Fund (NYSE:MSDL) by selling 320,000 shares. The estimated transaction value, based on the average closing price for the first quarter of 2026, was approximately $4.95 million. The fund’s stake went from 320,000 shares to zero, eliminating its exposure to the company.

What else to know

• The fund fully sold out of MSDL; the position was previously 1.4% of AUM in the prior quarter and is now zero
• Top holdings after the filing:
  • NYSE: AMLP: $12.63 million (7.7% of AUM)
  • NASDAQ: KSPI: $8.15 million (5.0% of AUM)
• As of May 6, 2026, MSDL shares were priced at $15.69, down 8.0% on a total return basis over the past year, underperforming the S&P 500 by 41.1 percentage points

Company overview

Company snapshot

• MSDL offers directly originated senior secured term loans, including first and second lien loans, primarily to middle-market companies.
• The fund operates as a business development and finance company that engages in lending to middle-market companies.
• It lends to middle-market companies.

Morgan Stanley Direct Lending Fund specializes in providing tailored credit solutions to middle-market companies, leveraging its origination capabilities and expertise in senior secured lending. The company’s strategy focuses on directly sourced loans. With a strong dividend yield and consistent profitability, the fund serves the private credit market segment.

What this transaction means for investors

What stands out in the filing isn't the MSDL exit on its own — it's that Truffle Hound also closed out New Mountain Finance(NASDAQ:NMFC) and PennantPark Floating Rate Capital(NYSE:PFLT) in the same quarter. All three are business development companies, a structure that pools capital to lend directly to private, mid-sized businesses in exchange for yield. Three of them gone in a single filing, with no public explanation from the fund. The common thread is visible; the rationale isn't. For anyone evaluating MSDL on its own terms, that pattern is context, not a signal. The more meaningful inputs are net asset value per share, non-accrual rates on the loan book, and whether the distribution is covered by net investment income. A small fund exiting a minor position doesn't move any of those needles — and those are the numbers that actually determine whether the yield is worth holding.

Seena Hassouna has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Joint Stock Kaspi.kz. The Motley Fool recommends PagSeguro Digital. The Motley Fool has a disclosure policy.