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MSIF SEC Response Letter -11.19.24

 1900 K Street, NW

Washington, DC  20006-1110

+1  202  261  3300  Main

+1  202  261  3333  Fax

www.dechert.com

 HARRY S. PANGAS

harry.pangas@dechert.com

+1 202 261 3466 Direct

+1 202 261 3333 Fax

November 19, 2024

VIA EDGAR

Division of Investment Management

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Attn: Christina DiAngelo Fettig and Anu Dubey

Re:

 MSC Income Fund, Inc.

Registration Statement on Form N-2

File Number: 333-282501

Ladies and Gentlemen:

On behalf of MSC Income Fund, Inc. (the “Company”), this letter responds to the comments provided

telephonically by the staff (the “Staff”) of the U.S. Securities and Exchange Commission (“SEC”) to

Dechert LLP, counsel to the Company, on October 28, 2024 and October 29, 2024 relating to the

Company’s registration statement on Form N-2 filed by the Company with the SEC on the October 3, 2024

(such registration statement being referred to herein as the “Registration Statement”).

For your convenience, the Staff’s comments are summarized in this letter, and each comment is followed

by the response of the Company to the comment.

Accounting Comments

General

1.Comment: Please file a cover letter with the initial filing of any future registration statements

explaining the reason for the filing.

Response: The Company acknowledges the Staff’s comment and undertakes to include such an

explanatory cover letter with the initial filing of any of its future registration statements.

2.Comment: Please update all financial statements and related financial information in Pre-

Effective Amendment No. 1 to the Registration Statement (“Amendment No. 1”) to include the

Company’s September 30, 2024 financial statements and related financial information.

Response: The Company has updated the disclosure accordingly.

3.Comment: Please include an updated consent of the Company’s independent registered public

accounting firm as an exhibit to Amendment No. 1.

Response: The Company has included an updated consent of its auditor as an exhibit to

Amendment No. 1.

Prospectus Summary, Pages 5 and 6

4.Comment: Please add the weighted-average annual effective yield on the Company’s entire

investment portfolio and the total return based on the change in net asset value to the disclosure

under the subheading Investment Portfolio and in each instance where portfolio investment yield

calculations are presented throughout the Registration Statement.

 November 19, 2024

Page 2

Response: The Company has revised the disclosure accordingly.

Financial Highlights, Page 17

5.Comment: Please replace the term “dividends” with the term “distributions” in the Financial

Highlights section in Amendment No. 1 and the Company’s future periodic reports. See Item 4 of

Form N-2.

Response: The Company has conformed the dividend/distribution line-item titles in the Financial

Highlights table in Amendment No. 1 with the line-item titles contained in Item 4 of Form N-2

and undertakes to do so in its future periodic reports.

Risk Factors, Page 26

6.Comment: If the Company has not been acting as a non-diversified investment company for an

extended period of time prior to the filing of Amendment No. 1, please consider whether any

clarifications or modifications to the risk factor, “We are a non-diversified investment company

within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion

of our assets that may be invested in securities of a single issuer” are appropriate, such as

disclosing that the Company has acted as a diversified investment company for a period of time

and if it starts acting as a non-diversified investment company certain risks could increase.

Response: The Company acknowledges the Staff’s comment and has revised the disclosure

accordingly. However, while the Company’s investment portfolio may, from time to time, be

comprised of assets that could permit it to qualify as a “diversified company” within the meaning

of Section 5 of the Investment Company Act of 1940, as amended (the “1940 Act”), the Company

respectfully advises the Staff that the Company has historically operated as a “non-diversified”

investment company and has no intent to affirmatively change its investment strategy to operate as

a “diversified” investment company in the future.

Distributions, Page 50 and 51

7.Comment: Similar to Comment 5 above, please replace the term “dividends” with the term

“distributions” in the Distributions section in Amendment No. 1.

Response: The Company has revised the disclosure accordingly.

Disclosure Comments

General

1.Comment: Please confirm in your response letter whether FINRA has reviewed the proposed

distribution arrangements for the offering and has issued a statement expressing no objections to

the offering arrangements.

Response: The Company respectfully advises the Staff that the Registration Statement and

offering of the Company’s common stock thereunder are exempt from FINRA review and

clearance.

2.Comment: Tell us in your response letter whether the Company will use test-the-waters materials

for potential investors in connection with the offering. If yes, the Staff will need to be provided

with an opportunity to review such materials and may have more comments on the Registration

Statement after it has done so.

Response: The Company will use test-the-waters materials in connection with the offering and

undertakes to provide the test-the-waters materials to the Staff, when available.

 November 19, 2024

Page 3

Cover Page

3.Comment: Please disclose the number of shares being registered above the name of the Company.

Response: The Company acknowledges the Staff’s comment and undertakes to disclose the

number of shares being registered in a subsequent pre-effective amendment to the Registration

Statement.

4.Comment: Please disclose the date, form and jurisdiction of organization of the Company in an

appropriate location in the Registration Statement. See Item 8.1.a of Form N-2.

Response: The Company has updated the disclosure on pages 1, 64 and 114 to include the date,

form and jurisdiction of the Company’s organization.

5.Comment: Disclose how the Company will achieve the part of its objective to achieve capital

appreciation from its equity and equity-related investments if its LMM portfolio is decreasing and

it is shifting its strategy is to be solely focused on its Private Loan investment strategy.

Response: The Company has 21% of its total investment portfolio in equity and equity-related

investments as of September 30, 2024, 74% of which is from the Company’s LMM investment

strategy and 15% of which is from the Private Loan investment strategy. As a result, the Company

believes that the objective as stated is still appropriate. However, the Company acknowledges that

the Company’s investment objective will change in the future to be primarily focused on

generating current income from its debt investments in its Private Loan investment strategy as the

Company executes its plan to transition away from its historical investment strategy including

investments in both the LMM and Private Loan investment strategies to a strategy solely focused

on its Private Loan investment strategy. As a result, the Company has revised the disclosure

accordingly.

Prospectus Summary, Overview of Our Business, page 1

6.Comment: If the Company’s investment objective can be changed without a shareholder vote,

please disclose such fact in an appropriate location in the Registration Statement. See Item 8.2.a.

of Form N-2.

Response:  The Company has revised the disclosure accordingly on page 29 of Amendment No. 1.

Prospectus Summary, page 2

7.Comment: We refer to the Other Portfolio investments disclosure on page 2 of the Registration

Statement. Please replace the “investments which may be managed by third parties” language

contained therein with a plain English description thereof (e.g., “investments in non-affiliated

investment funds”).  In addition, please identify Other Portfolio investments that are part of the

Company’s principal strategies and disclose any corresponding principal risks under Risk Factors.

See Instruction to Item 3.2 of Form N-2.

Response: The Company has replaced the referenced disclosure as requested.  In addition, the

Company advises the Staff that Other Portfolio investments are not a principal part of the

Company’s investment strategies and, as a result, the Company does not believe it is necessary to

revise the disclosure relating thereto, including with respect to any corresponding principal risks.

In this regard, the Company notes that Other Portfolio investments constituted less than 3% of its

total investment portfolio (at fair value) as of September 30, 2024.

Prospectus Summary, page 4

8.Comment: Please clarify what each of the terms “lower leverage entry points” and “lower equity

entry points” means in plain English.

 November 19, 2024

Page 4

Response:  The Company has revised the disclosure accordingly on pages 4 and 119 of

Amendment No. 1.

Prospectus Summary, page 6

9.Comment: We refer to the section entitled “Our Adviser and the Administrator” on page 6 of the

Registration Statement.  Please tell us in correspondence:

a.The specific services Main Street and its employees will provide to the Company on the

Adviser’s behalf and why those services do not amount to advisory services provided to

the Company.

b.    The extent to which the Adviser will depend on Main Street’s personnel.

c.    Whether Main Street’s personnel who provide investment advice with respect to the

Company will be supervised persons of the Adviser under Section 202(a)(25) of the

Advisers Act.

d.   Whether and what fees are paid to Main Street and by whom and whether or not such fees

are paid pursuant to an agreement and, if they are, who the agreement is between.

e.    Whether Main Street is considered a fiduciary with respect to the Company.

f.   Whether the personnel being provided to the Company are personnel of Main Street or of

any of Main Street’s affiliates and, if applicable, explain how such entities are affiliated

with Main Street, the Adviser and the Company (i.e., controlled subsidiaries, wholly or

majority owned).

g.    Explain the registration status of each such affiliate, if applicable.

h.    Where the affiliate is domiciled, if applicable.

Please also provide us with any written agreement governing this arrangement whereby Main

Street provides its employees to the Adviser.

Response:

a.MSC Adviser I, LLC (the “Adviser”) serves as the sole investment adviser to the

Company. Main Street has not and will not enter into an investment advisory agreement

with the Company. Rather, Main Street and the Adviser have entered into a sharing

agreement pursuant to which Main Street provides the Adviser with investment

professionals and access to its resources. Pursuant to the sharing agreement, Main Street

provides resources and services to the Adviser only, does not provide services of any kind

to the Company (including any investment advisory services) and does not receive any

compensation from the Company.

b.Because the Adviser does not have any employees, it depends solely on the investment

professionals provided to it by Main Street pursuant to the sharing agreement in

connection with its provision of investment advisory services to the Company. In light of

such fact, the Company has added a risk factor relating to the Adviser’s dependence on

the investment professionals provided to it by Main Street under the sharing agreement.

c.The investment professionals of the Adviser provided by Main Street pursuant to the

resource sharing agreement are “supervised persons” of the Adviser under Section

202(a)(25) of the Investment Advisers Act of 1940, as amended.

d.Pursuant to the sharing agreement, Main Street provides resources and services to the

Adviser only and does not provide services of any kind to the Company (including any

investment advisory services) and does not receive any compensation from the Company.

Pursuant to the sharing agreement, the Adviser reimburses Main Street for the allocable

portion of Main Street’s costs in providing resources and services to the Adviser under

the sharing agreement, including, without limitation, the costs of the investment

personnel shared with the Adviser and related overhead.

e.Because Main Street is not an investment adviser to the Company and does not otherwise

provide investment advisory services to the Company, it does not have any fiduciary

duties to the Company.

f.The investment professionals being provided by Main Street to the Adviser pursuant to

the sharing agreement are employees of Main Street.

g.Not applicable.

h.Not applicable.

 November 19, 2024

Page 5

The Company will supplementally provide the Staff with a copy of the sharing agreement between

Main Street and the Adviser.

Prospectus Summary, page 7

10.Comment: We refer to footnote 3 to the table on page 7 of the Registration Statement, which

states that “from time to time, we may form subsidiaries.”  Please update the disclosure as follows:

a.Define in the disclosure “subsidiary” as entities that primarily engage in investment

activities in securities or other assets that are wholly owned by the Company. Please note

this definition should include existing Taxable Subsidiaries and Structured Subsidiaries.

b. Disclose that the Company complies with the 1940 Act provisions governing capital

structure and  leverage (Section 18, as modified by Section 61) on an aggregate basis

with the subsidiaries.

c.Disclose that any investment adviser to a subsidiary complies with the 1940 Act

provisions governing investment advisory contracts (Section 15) as if it were an

investment adviser to the Company under Section 2(a)(2) of the 1940 Act. Confirm that

any advisory agreement between the subsidiary and its investment adviser will be filed as

an exhibit to the Registration Statement as it is a material contract.

d.Disclose that each subsidiary complies with the 1940 Act provisions relating to affiliated

transactions and custody (Section 17, as modified by Section 57). Disclose the custodian

of the subsidiaries, if any.

e.Disclose any subsidiary principal strategies and principal risks that constitute principal

strategies and principal risks of the Company.

f.Tell us whether financial statements of any subsidiary will be consolidated with those of

the Company. If not, explain why not.

g.Confirm to us that subsidiaries and their boards will agree to inspection by the Staff of

the subsidiaries’ books and records, which will be maintained in accordance with Section

31, as modified by Section 64 and the rules thereunder.

h.Confirm to us that any foreign subsidiary and its board will agree to designate an agent

for service of  process in the U.S.

i. Confirm to us that the management fee of any wholly owned subsidiary will be included

in the “management fee” line item of the Fee Table and such subsidiaries’ other expenses

will be included in the “other expenses” line item of the Fee Table.

j.Disclose that the Company does not intend to create or acquire primary control of any

entity that primarily engages in investment activities in securities or other assets other

than entities wholly-owned by the Company.

Response:

a.The Company has revised the disclosure accordingly on pages 9 and 115 of Amendment

No. 1.

b.The Company has revised the disclosure accordingly on pages 9 and 115 of Amendment

No. 1.

c.The Company has revised the disclosure accordingly and respectfully advises the Staff

that none of the Company’s wholly-owned subsidiaries have any investment advisers.

d.The Company has revised the disclosure accordingly on pages 9 and 115 of Amendment

No. 1.