Morgan Stanley and Cliffwater LLC capped investor withdrawals from their private credit funds following a surge in redemption requests.
Morgan Stanley’s $8 billion North Haven Private Income Fund received requests to withdraw 10.9% of its shares. The fund will honor only its 5% quarterly limit. Cliffwater’s $33 billion fund faced record redemption requests for 14% of its assets and limited withdrawals to 7%.
These restrictions follow similar moves by BlackRock and Blue Owl as investor anxiety regarding the private credit market grows. Market concerns center on the illiquid nature of assets and the quality of underlying loans, specifically within the software sector.
JPMorgan recently marked down the value of certain private credit loans used as collateral. These markdowns are further tightening lending conditions for private credit funds.