Morgan Stanley caps redemptions at $7B private credit fund

Morgan Stanley has restricted investor withdrawals at its nearly $7 billion North Haven Private Income Fund for the third consecutive quarter. In the third quarter of 2026, investors requested to redeem 11.4% of shares, but the fund maintained a 5% cap on redemptions, fulfilling less than half of the total requests.

This move follows a pattern of elevated redemption requests. In the first and second quarters of 2026, investors requested approximately 10.9% and 11.6% of shares, respectively, with the fund honoring only a fraction of those amounts. Despite maintaining a liquidity buffer of over $2.2 billion in undrawn capacity and $400 million in liquid loans as of May 2026, the fund has struggled to meet the demand.

Morgan Stanley is not alone in managing these liquidity pressures. Other major asset managers, including Blackstone, BlackRock, and Apollo, have faced similar challenges with their private credit and real estate vehicles as investors seek to pull cash from the $1.8 trillion private credit market. The industry continues to work through a backlog of withdrawal requests following concerns regarding underwriting standards and exposure to certain software investments.