Morgan Stanley’s flagship $7 billion North Haven Private Income Fund (PIF) has once again limited redemptions, a regulatory filing on Tuesday revealed. Investors sought to withdraw approximately 11.6% of units outstanding in the second quarter, with the fund agreeing to meet 43% of these requests. Morgan Stanley is a major global financial services firm, providing a broad range of investment banking, securities, wealth management, and investment management services. This marks a continuation of redemption limits, following a prior quarter where about 10.9% of the fund was sought for withdrawal, with 43% of those requests also met.
About half of the latest withdrawal requests reportedly came from investors who were unable to fully cash out in earlier periods. Despite this, Morgan Stanley’s investment management arm stated, “We believe that both the composition as well as the stabilisation in the level of request activity as compared to the first quarter may be indicative of durability in the Company’s investor base.” The broader private credit sector, particularly funds geared towards retail investors, experienced historic redemptions in the first quarter, driven by concerns over lending standards and the potential impact of artificial intelligence on the software sector. As of May 31, PIF had 22.7% exposure to the software industry across its 301 borrowers.
The situation for business development companies (BDCs) has yet to stabilise, with funds managed by major firms such as Apollo Global, Blackstone, and BlackRock also limiting investor withdrawals. For PIF, after accounting for new subscriptions and dividend reinvestments, the net impact on its net asset value amounted to approximately $102 million, representing 3.2% of its March 31 value. Separately, an affiliated fund, North Haven Private Income Fund A, faced 7.2% redemption requests, of which 5% will be honoured. Analysts and executives have cautioned that non-traded BDCs are likely to experience slower inflows and elevated redemptions in the coming quarters, as market volatility persists.
