Kevin Shannon

About Kevin Shannon

Kevin Shannon (age 70) is an Independent Director of Morgan Stanley Direct Lending Fund (MSDL), serving since 2019 with his current Class I term expiring at the 2026 annual meeting . He was CFO of Harvard Management Company from 2009–2020, previously CFO/EVP at Moore Capital Management, senior finance roles at Lehman Brothers, and began as an auditor at KPMG; he holds a BS magna cum laude from NYU and an MBA from Fairleigh Dickinson University . He also serves on the boards of the other MS BDCs, has chaired valuation/risk committees in prior roles, and is active in community organizations and industry groups (Managed Funds Association) . The Board has determined he is an Independent Director under NYSE and 1940 Act standards and an “audit committee financial expert” .

Past Roles

External Roles

Board Governance

• Committee assignments and chairs:

  • Compensation Committee: Shannon is Chair; members include Binstock, Frank, Metz; all Independent under NYSE and 1940 Act .
  • Audit Committee: Member; all Independent under NYSE/Exchange Act; Board determined Shannon is an “audit committee financial expert” .
  • Nominating & Corporate Governance Committee: Member; all Independent; Chair is Binstock .

• Independence and attendance:

  • Independent Director status affirmed after review of relationships under 1940 Act; Independent Directors comprise all committees .
  • Board met 5 times in 2024; no incumbent Director attended fewer than 75% of Board and relevant committee meetings; 2 Directors attended the 2024 annual meeting .

• Lead Independent Director and executive sessions:

  • Company does not currently have a designated Lead Independent Director; offsets potential conflicts with regular executive sessions of Independent Directors and Independent-only committees .

Committee Meeting Activity

Fixed Compensation

• Policy changes:
  • Pre-IPO (through Jan 26, 2024): Independent Directors received $75,000 annual fee; meeting fees ($2,000 per in-person Board, $1,000 telephonic; $1,000 per in-person committee, $500 telephonic, if not same day); Audit Chair received additional $7,500 .
  • Post-IPO (from Jan 26, 2024): Annual fee increased to $125,000; Audit Chair additional $15,000; reasonable out-of-pocket expenses reimbursed .

• Actual compensation paid (Company and Fund Complex totals):

Note: Fund Complex includes MSDL, T Series, PIF, PIF A, LGAM, SL Investment Corp. and SLIF .

Performance Compensation

Other Directorships & Interlocks

Expertise & Qualifications

• Audit committee financial expert designation under Item 407 of Regulation S‑K .
• Senior finance leadership across endowment, hedge fund, and sell-side derivatives operations (HMC, Moore Capital, Lehman) .
• Valuation and risk committee experience; treasury and control functions oversight .
• Academic credentials: BS magna cum laude (NYU) and MBA (Fairleigh Dickinson) .

Equity Ownership

• Beneficial ownership and alignment:
  • Shares beneficially owned as of the Record Date: 24,080; less than 1% of outstanding (87,920,526 shares) .
  • Prior year beneficial holdings: 24,079 (as of 2024 Record Date; 88,894,490 shares outstanding) .
  • Earlier holdings: 17,520.858 (as of 2022 Record Date; 57,196,918.324 shares outstanding) .
  • Dollar range ownership: “Over $100,000” in Company; “Over $100,000” aggregate in Fund Complex across years .

• Hedging/pledging:
  • Code of Ethics does not expressly prohibit hedging transactions (e.g., collars, swaps, exchange funds) by directors or the Adviser’s personnel .
  • Pledging practices not disclosed .

Insider Trades (2025)

Governance Assessment

• Board effectiveness and independence:

  • Shannon’s finance, valuation, and risk credentials strengthen audit oversight; designation as an audit committee financial expert and chairing the Compensation Committee since Sep 2023 indicate active, relevant governance engagement .
  • Attendance expectations met; no Director fell below 75%, and committee activity increased in 2024 (notably Nominating & Corporate Governance and Compensation) .

• Alignment and incentives:

  • Compensation for Independent Directors is cash-based; post-IPO retainer increase to $125k with audit chair premium; no equity/option awards disclosed for directors—reduces dilution but can limit alignment versus equity-based plans .
  • Shannon holds >$100k in MSDL and made open market purchases in 2025, a positive alignment signal for investors .

• Conflicts and related-party exposure:

  • External management via Morgan Stanley adviser; significant advisory/incentive fees paid (2024 base management fees $25.48M net of waiver; income-based incentive fees $37.43M); quarterly Audit Committee review of related-party transactions mitigates risks .
  • MS&Co underwriting IPO fees ($1.24M) and notes placement fees ($210,180) indicate affiliate transactions; board independence and oversight structures are important safeguards .

• RED FLAGS

  • Hedging not explicitly prohibited in Code of Ethics could undermine ownership alignment if used; absence of disclosed stock ownership guidelines for directors is a governance gap .
  • No Lead Independent Director while an Interested Director chairs the Board increases perceived conflict risk; mitigations include independent-only committees and executive sessions but investors may prefer a lead independent role .

Overall, Shannon’s deep finance background, audit/valuation experience, and recent open market purchases support investor confidence, while structural conflicts inherent to externally managed BDCs and permissive hedging policy warrant close monitoring of committee governance and related-party oversight .