Morgan Stanley BDC Holds 5% Redemption Cap Despite 11.6% Requests

Morgan Stanley's (MS) affiliated non-traded business development company (BDC), North Haven Private Income Fund, has received repurchase requests totaling approximately 11.6% of outstanding shares for the second quarter. Despite the high demand, the fund will maintain its 5% quarterly redemption cap, fulfilling about 43% of the requests on a pro rata basis, as stated in a June 23 investor letter.

Details of Requests and Redemption

According to the letter, more than half of the repurchase requests received in Q2 came from investors whose previous requests were either denied or only partially fulfilled. By sticking to the 5% cap, the fund will allocate redemptions proportionally among all requesting investors.

Background on the Fund

North Haven Private Income Fund is a non-traded BDC that focuses on providing private credit to middle-market companies. These funds offer higher yields but come with liquidity constraints due to their non-traded nature.

What This Means for Investors

The fund's adherence to its redemption cap is a common practice among non-traded BDCs to maintain stability and prevent large outflows. While this may raise liquidity concerns for some investors, it also demonstrates disciplined liquidity management by the fund's managers.