Investors asked to pull 11.4% of the private credit vehicle. The 5% quarterly cap means most will wait.
Investors in Morgan Stanley's North Haven Private Income Fund asked to redeem 11.4% of the fund in the third quarter, more than double the 5% of net asset value the fund allows out each quarter.
The arithmetic is unforgiving. With requests at 11.4% and the cap at 5%, the fund can satisfy only about 44 cents of every dollar investors asked to withdraw. The rest rolls into future quarters, where it competes with new requests for the same limited capacity.
A backlog that feeds itself
That dynamic is already visible. About two-thirds of the current requests come from investors whose earlier submissions were only partly filled. Repurchases across the three most recent quarterly windows are expected to total roughly $479 million. When unmet requests carry forward, the queue can lengthen even if no new investors decide to leave.
The third-quarter tender offer ran from August 14 through September 14.
The size of the fund
North Haven reported net asset value of about $3.12 billion as of August 31, the fund disclosed in a regulatory filing this week. Its portfolio spans 294 companies across 43 industries with $6.59 billion in aggregate par value. The gap between the two figures reflects the fund's use of leverage: it holds more than two dollars of loans for every dollar of investor equity.
At that NAV, the 5% cap allows roughly $156 million out per quarter, which frames how long it could take to clear the backlog if requests stay elevated.
Money still coming in
The fund is not only shrinking. The same filing disclosed a new Class S subscription of about 432,819 units, worth roughly $7.73 million at $17.86 per unit. It also declared a regular distribution of $0.119 per unit plus a special distribution of $0.011, payable around October 5. The combined 13 cents equals about 0.73% of the unit price.
Why it matters beyond one fund
North Haven is one of a group of semi-liquid private credit vehicles sold through wealth channels on the promise of steady income and periodic access to cash. The quarterly cap is a design feature, meant to protect remaining investors from forced loan sales. But when requests run at more than twice the limit, the promise of liquidity starts to look conditional.
The number to watch next quarter is the request rate. If it falls back toward 5%, the backlog clears. If it stays above 10%, the fund's gate becomes a semi-permanent feature, and the pressure on the broader wealth-channel private credit market grows.