Morgan Stanley Stock (MS) Falls as Private Credit Contagion Spreads Across Wall Street

FomoAnxiety · 2026-03-12T18:40:45+00:00

Morgan Stanley's stock dropped 4% after it capped withdrawals from its North Haven Private Income Fund amid heightened investor redemption requests, raising concerns about the private credit market's health.

FomoAnxiety

2026-03-12 18:40:45

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Morgan Stanley’s MS -3.80% ▼ stock is down 4% on March 12 after the investment bank became the latest Wall Street firm to cap withdrawals from a private credit fund.

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In a letter to investors, Morgan Stanley said that it saw a wave of redemption requests this quarter, forcing it to limit withdrawals. The bank’s North Haven Private Income Fund, which has $7.6 billion in assets under management, received investor requests to buyback around 10.9% of outstanding shares in its quarterly tender offer.

Morgan Stanley has now capped repurchases at 5%, sending its stock lower as a result. “By maintaining appropriate limits on the quarterly repurchase offer, the [fund] seeks to avoid asset sales during periods of market dislocation,” reads the letter to investors.

Private Credit Fears

The spike in withdrawal requests comes as investors grow increasingly worried about the health of private credit funds. Blue Owl Capital OWL -1.88% ▼ and BlackRock BLK -1.34% ▼ have also limited withdrawals from certain of their private credit funds, raising alarms across Wall Street of a looming crisis in credit quality.

JPMorgan Chase JPM -1.97% ▼ spooked markets when it recently marked down the value of several private loans made to software companies. Morgan Stanley has acknowledged the growing concerns but called current worries about credit deterioration “speculation” on the part of investors.

Is MS Stock a Buy?

Morgan Stanley’s stock has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on five Buy, eight Hold, and one Sell recommendations issued in the last three months. The average MS price target of $186.58 implies 20.46% upside from current levels.

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