Morgan Stanley caps withdrawals at private credit fund as redemptions surge
Morgan Stanley's 4-billion-dollar private credit fund restricted redemptions after withdrawal requests exceeded the fund's quarterly capacity for the third consecutive quarter. The move is being read as the first major liquidity signal from the fast-growing 1.7-trillion-dollar private credit market.
Morgan Stanley Investment Management told investors it has restricted redemptions in its semi-liquid private credit fund after withdrawal requests pushed the fund's quarterly five-percent cap to eleven percent in the second quarter. The bank cited « our obligation to safeguard the fund's stability and the value of undistributed assets » in the letter.
The fund holds a portfolio of direct corporate-borrower loans and was considered a pioneer of semi-liquid private credit structures open to individual investors. Wells Fargo private capital strategists project that an eight-percent redemption quota will be paid in tranches by the end of the third quarter, with the remainder pushed into the first half of 2026.
On the regulatory side, SEC Commissioner Hester Peirce called the withdrawals « a natural part of the maturation of the retail channel in private credit », though the FDIC dissented with a view calling for stricter standards. Comparable products from Apollo, Ares and Blackstone fell three to five percent after hours.
Read next
Australian minister won't commit to delaying NDIS exit if supports aren't ready
The minister responsible for Australia's National Disability Insurance Scheme, Jenny McAllister, would not say whether the government will delay participants' exit from the scheme if foundational supports are not ready, but insisted the government will not leave people in freefall.
Luigi Mangione pleads guilty to killing UnitedHealthcare CEO
New commissioner takes on task of reforming culture at Australia's Defence Force
Singapore orders transshipping firms to declare true country of origin of goods
