The $7bn North Haven private credit fund fulfills less than half of Q2 exit requests as liquidity strains test semi-liquid credit models.
Morgan Stanley’s $7bn North Haven Private Income Fund will honor only 5% of Q2 redemption requests, leaving over half of investor withdrawals unmet. Demand reached 11.6% of shares, triggering the fund’s quarterly cap and highlighting growing liquidity pressures in private credit markets.
The backlog reflects broader stress in semi-liquid credit, where redemption queues compound quarter-over-quarter. Moody’s reports default rates above 5% in private credit, driven by exposure to AI-disrupted software borrowers, signaling deteriorating asset quality beyond behavioral liquidity constraints.
Policymakers are scrutinizing contagion risks, with Treasury and congressional engagement assessing potential spillovers into the broader financial system.