Morgan Stanley Private Credit Fund Gates Withdrawals Again

Morgan Stanley’s North Haven Private Income Fund (PIF), an $8 billion non-traded business development company, limited investor withdrawals during the second quarter after redemption requests exceeded the fund’s quarterly liquidity threshold.

According to a company filing, investors sought to redeem 11.6% of outstanding shares during the quarter, well above the fund’s 5% quarterly redemption cap. As a result, requests were satisfied on a pro-rata basis, with investors receiving approximately 43% of the amount they requested.

The latest redemption activity represents an increase from the first quarter, when investors sought to withdraw 10.9% of outstanding shares.

After accounting for new subscriptions and dividend reinvestments, the net impact of the redemptions reduced the fund’s net asset value by approximately $102 million, or about 3.2% of its March 31 NAV.

Despite elevated withdrawal requests, Morgan Stanley emphasized the fund’s liquidity position. As of late May, North Haven Private Income Fund held more than $2.2 billion in cash and available borrowing capacity and maintained a debt-to-NAV ratio of 0.97x.

The portfolio remains broadly diversified, with investments in 301 borrowers across 45 industries. Software represented the largest sector exposure, accounting for 22.7% of the portfolio.

Morgan Stanley also noted that more than half of the second-quarter redemption requests came from investors whose withdrawal requests had already been partially fulfilled during the first quarter, suggesting that redemption activity may be concentrated among a relatively small segment of shareholders.

The development mirrors a broader trend across the private credit industry. Wealth-focused private credit funds managed by Apollo, Ares and BlackRock have also experienced elevated redemption requests and have similarly enforced quarterly withdrawal limits designed to protect long-term investors and preserve portfolio stability.