Morgan Stanley $MS's North Haven Private Income Fund told investors it will fulfill roughly 43% of second-quarter withdrawal requests after investors sought to redeem 11.6% of units outstanding — more than double the fund's 5% quarterly repurchase cap.
The $7 billion fund said it will accept repurchases equal to 5% of units outstanding as of March 31, 2026, with the remainder of requests left unmet. After factoring in new subscriptions and dividend reinvestments, the net impact on the fund's net asset value comes to approximately $102 million, or about 3.2% of its March 31 value, the fund said.
Investors who had been locked out of a full exit when the fund faced 10.9% redemption pressure in the first quarter accounted for more than half of this quarter's withdrawal requests.
"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," Morgan Stanley Private Credit said in the investor letter.
The fund said it held more than $2.2 billion in undrawn debt capacity and cash as of May 31, 2026, and carried a debt-to-NAV ratio of 0.97x. It also reported a portfolio of more than $400 million in liquid loans.
At North Haven Private Income Fund A, a related but smaller vehicle, withdrawal requests totaled 7.2% of units — of which only 5% will be redeemed, in line with the fund's standard cap.
As of May 31, the fund's portfolio spanned 45 industries and 301 individual borrowers, with software representing about 22.7% of total exposure, according to Bloomberg. Investors have grown wary of private credit funds this year amid concerns about loan quality and the potential for artificial intelligence to disrupt software businesses, a key area of exposure for many lenders in this market.
The redemption pressure extends well beyond Morgan Stanley: Apollo Global, Blackstone, and BlackRock $BLK are among the other managers that have placed restrictions on exits from their own vehicles, Reuters reported. The broader non-traded private credit category hit a milestone in the first quarter when money flowing out exceeded fresh capital coming in for the first time on record.