June 23 (Reuters) – Morgan Stanley has limited redemptions again at its $7 billion flagship private credit fund after investors sought to withdraw almost 11.6% of units outstanding, a regulatory filing showed on Tuesday.
North Haven Private Income Fund (PIF) said it would meet 43% of second‑quarter redemption requests after investors sought to withdraw about 10.9% of the fund in the prior quarter, adding that about half of the latest requests came from investors who had been unable to fully cash out earlier.
“We believe that both the composition as well as the stabilization in the level of request activity as compared to the first quarter may be indicative of durability in the Company’s investor base,” the bank’s investment management arm said in the letter.
Private credit funds geared toward retail investors saw historic redemptions in the first quarter, driven by mounting concerns over lending standards and rising fears that AI could undermine the software sector – a key area of exposure for many lenders.
Morgan Stanley said the PIF was invested in 301 borrowers across 45 industries as of May 31 and had around 22.7% exposure to the software industry.
Conditions have yet to stabilize around business development companies (BDCs), with funds run by Apollo Global, Blackstone and BlackRock also limiting investor withdrawals.
PIF said that after accounting for new subscriptions and dividend reinvestments, the net hit to its net asset value was about $102 million, or 3.2% of its March 31 value.
Separately, a smaller affiliated fund, North Haven Private Income Fund A, faced 7.2% redemption requests, 5% of which will be honored at the customary threshold level.
Analysts and executives have warned that non‑traded BDCs are likely to face slower inflows and elevated redemptions in the coming quarters, as market volatility persists.
(Reporting by Pragyan Kalita in Bengaluru; Editing by Vijay Kishore and Anil D’Silva)
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