Morgan Stanley limits redemptions at $7B private credit fund for third straight quarter

Morgan Stanley has once again restricted how much money investors can pull from its roughly $7 billion North Haven Private Income Fund, marking the third consecutive quarter the firm has been forced to cap redemptions. Investors wanted out at more than twice the rate the fund was willing to accommodate.

In a shareholder letter dated September 18, 2026, the fund disclosed that withdrawal requests hit 11.4% of shares for the most recent quarter. The fund honored only the standard 5% cap, meaning fewer than half of the requested redemptions were actually fulfilled.

A pattern, not a one-off

This isn’t a surprise for anyone who’s been watching the fund’s recent track record. In Q2 2026, investors requested 11.6% in redemptions and received roughly 43% of what they asked for. The quarter before that, Q1, saw requests of 10.9%, with approximately 45.8% fulfilled, translating to about $169 million returned to investors.

Morgan Stanley’s fund has built what it calls a liquidity buffer: over $2.2 billion in undrawn capacity and approximately $400 million in liquid loans, as of May 31, 2026. That’s a meaningful war chest, but it hasn’t been enough to satisfy the wave of withdrawal demand.

The industry-wide squeeze

Morgan Stanley is far from alone in this predicament. Blackstone, Apollo, and BlackRock have all faced similar pressures on their private credit and real estate vehicles.

Cliffwater, another prominent manager, limited redemptions in its own fund to 7% during Q1 2026 after investors requested 14%.

What investors should be watching

The North Haven fund’s net asset value has declined by an estimated $100 million to $169 million per quarter after accounting for new investments and subscriptions.