Morgan Stanley has limited redemptions at one of its private credit funds after investors sought to withdraw almost 11% of shares outstanding, according to a report by Reuters citing a regulatory filing.
In a letter to investors, the firm said its North Haven Private Income Fund (PIF) returned about $169m – roughly 45.8% of tender requests – for the quarter. Morgan Stanley said it would fulfil tender requests equivalent to 5% of units outstanding as of 31 December.
The firm said limiting withdrawals would help avoid asset sales during “periods of market dislocation” and support long-term risk-adjusted returns. The fund was invested in 312 borrowers across 44 industries as of 31 January, with credit fundamentals described as broadly stable.
The move comes amid heightened scrutiny of the private credit market following a series of credit concerns and uncertainty around an M&A recovery, potential credit deterioration and declining asset yields.
Recent volatility has also been linked to concerns that artificial intelligence could weaken the earnings power of software companies – a major borrowing segment for private credit lenders. The sector has also faced pressure after issues around asset sales at Blue Owl triggered a sell-off in shares of alternative asset managers with exposure to private credit.
Other large asset managers have also moved to limit withdrawals. BlackRock recently disclosed restrictions on redemptions from a flagship debt fund, while Blackstone said earlier this month that its BCRED private credit vehicle experienced a surge in withdrawal requests during the first quarter.
