Morgan Stanley caps withdrawals in private credit fund as redemption requests jump

Morgan Stanley has limited withdrawals from one of its private credit funds after investor redemption requests exceeded the fund’s quarterly cap, according to a regulatory filing and investor letter.

The firm said investors sought to redeem roughly 11% of outstanding units in the North Haven Private Income Fund, while the fund’s terms allow redemptions of up to 5% per quarter. Morgan Stanley said it fulfilled about 45.8% of tender requests this period, returning around $169 million.

In its communication to investors, the bank said the cap is intended to avoid forced asset sales during periods of market stress and to protect long-term, risk-adjusted returns. It also said portfolio credit fundamentals remain broadly stable.

The move comes amid broader pressure in private credit markets, where investors have grown more cautious after recent markdowns, withdrawal limits at other major funds, and renewed concern about borrower resilience in a higher-rate environment.

Private credit has expanded rapidly in recent years, and analysts say the latest redemption controls are likely to keep scrutiny high around liquidity terms, portfolio quality, and valuation practices across the sector.

Source: Reuters reporting (March 11, 2026). Adapted and summarized by RuffWire.