Stock Markets June 23, 2026 04:34 PM

Morgan Stanley Private Income Fund Caps Redemptions at 5% Amid Q2 Outflows

North Haven Private Income Fund repurchases a limited portion of outstanding units after 11.6% of shares were tendered in Q2

By Leila Farooq
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Morgan Stanley's North Haven Private Income Fund saw redemption requests equal to 11.6% of its outstanding units in the second quarter. The fund accepted repurchase requests for 5% of outstanding units on a prorated basis, fulfilling roughly 43% of each investor's requested amount. Repurchases will be executed at the fund's net asset value per unit as of June 30, 2026. Liquidity measures and debt capacity provide support for meeting obligations.

Morgan Stanley Private Income Fund Caps Redemptions at 5% Amid Q2 Outflows
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Key Points

  • Redemption requests in Q2 totaled about 11.6% of outstanding units; the fund accepted repurchases equal to 5% of outstanding units on a prorated basis.
  • Repurchases will be executed at the net asset value per unit as of June 30, 2026; approximately 43% of each investor's redemption request was fulfilled.
  • Liquidity and leverage metrics include a debt-to-NAV ratio of 0.97x as of May 31, 2026, more than $2.2 billion in undrawn debt capacity and cash, and over $400 million in liquid loans to support repurchases.

Morgan Stanley said its North Haven Private Income Fund received redemption requests amounting to about 11.6% of outstanding units during the second quarter, according to an investor update dated June 2026.

In response, the fund agreed to repurchase 5% of outstanding units on a prorated basis. Under that approach, roughly 43% of each investor's redemption request was met. The units accepted for repurchase will be bought back at a price equal to the net asset value (NAV) per unit as of June 30, 2026.

The update noted that more than half of the second quarter redemption requests originated from unitholders whose earlier redemptions were prorated in the first quarter. That recurring pattern of requests contributed to the overall volume of redemptions this quarter.

After taking into account new subscriptions and dividend reinvestments, the net effect of the redemptions on the fund's NAV is approximately $102 million. The firm said that figure represents about 3.2% of the company's NAV as of March 31, 2026.

On liquidity and leverage, the fund reported a debt-to-NAV ratio of 0.97x as of May 31, 2026. As of the same date, the company had more than $2.2 billion in undrawn debt capacity and cash to draw on. The update also highlighted that the fund holds a portfolio of more than $400 million of liquid loans, which the firm said supports its ability to deploy capital while retaining flexibility to satisfy repurchase obligations.


Context and implications

The fund's decision to limit repurchases to 5% of outstanding units and to allocate redemptions on a prorated basis is a mechanism for balancing liquidity needs with ongoing portfolio management. The specified repurchase price ties redemptions to the fund's NAV at month-end, and the disclosed liquidity metrics - including undrawn debt capacity and a pool of liquid loans - outline the resources earmarked to meet those obligations.

Investors will receive repurchase proceeds based on the NAV per unit as of June 30, 2026, and not on transaction-date valuations. The update does not provide additional detail beyond the figures disclosed for redemption volumes, NAV impact, leverage, and available liquidity.

Risks

  • A substantial portion of Q2 redemption requests came from investors whose earlier redemption requests were prorated in Q1, indicating potential ongoing redemption pressure - this affects the fund management and credit sectors.
  • The net impact of redemptions reduced NAV by about $102 million, or roughly 3.2% relative to the company's NAV on March 31, 2026 - this may influence investor perception of fund stability in asset management and credit markets.
  • While the fund reports material liquidity resources, continued or increased redemption activity could strain available cash and undrawn capacity, presenting a risk to liquidity management for private credit funds.

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