Morgan Stanley announced that it would cap quarterly redemptions at 5% of assets for its North Haven Private‑Income Fund after investors requested withdrawals totaling about 10.9% of the fund’s $7.6 billion assets. The cap limits the amount investors can tender each quarter, directly affecting liquidity and signaling heightened caution in the private‑credit market.
The move follows a surge in redemption requests that exceeded the fund’s capacity. Only 45.8% of the requests were fulfilled, equating to roughly $169 million. The cap is intended to prevent forced asset sales at depressed valuations and to protect long‑term investor returns.
The North Haven Private‑Income Fund, a non‑exchange‑traded, perpetual‑life BDC, had $2.2 billion in liquidity as of January 31, 2026. The fund’s recent performance includes an annualized net return of 8.9% over three years and a 5.125% senior unsecured note due in 2028 with a BBB rating.
Management’s letter to investors highlighted concerns about loan quality, particularly to software companies facing AI‑driven disruption. The firm noted a “contraction in asset yields, uncertainty surrounding the recovery in M&A and speculation on credit deterioration,” while expressing optimism that some pressures may ease.
The capping of redemptions reflects broader stress in the private‑credit market. Other firms such as Cliffwater, HPS Investment, BlackRock, and Blackstone have also imposed redemption limits, and JPMorgan has reduced valuations of loans used as collateral by private‑credit firms, especially in the software sector.
Morgan Stanley’s action underscores the challenge of managing liquidity for alternative investment products amid investor concerns. While the firm’s overall financial services business remains robust, the event highlights sensitivity of its asset‑management arm to market sentiment and liquidity pressures in specific sectors.
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