Morgan Stanley Investment Management is set to launch a semi-liquid fund investing predominantly in private credit, as asset managers continue to push into the wealth market.
According to a recent filing, the manager has registered the North Haven Strategic Credit Fund as an interval vehicle with the Securities and Exchange Commission (SEC).
Similar to other semi-liquid fund structures, the filing states that the fund will offer quarterly repurchase offers of five per cent of outstanding shares.
Morgan Stanley will invest at least 80 per cent of the fund’s net assets in credit investments. These investments will include a mix of senior secured loans, corporate credit instruments and debt securities. The filing added that this could potentially include structured credit or opportunistic credit investments.
The diverse set of assets in Morgan Stanley’s interval fund differs slightly from business development companies (BDCs), which predominantly focus on direct lending.
It comes as private credit BDCs have had a challenging time, facing redemption requests far above the five per cent tender offer threshold, the latest being two funds managed by Blue Owl.
Concerns around BDC asset quality have been fuelled by scrutiny of their software exposure amid the AI boom, as well as broader worries about corporate credit quality following several high-profile bankruptcies.
However, despite widespread doubt, managers have continued to push into the wealth market. T. Rowe Price and Oak Hill Advisors launched a multi-strategy credit interval funds aimed at the US wealth market that can invest across the credit spectrum in both private and public markets in March.
Alongside this, last month, JPMorgan Chase & Co said it was planning to launch a private credit interval fund with a higher-than-usual quarterly redemption cap of 7.5 per cent and the potential for monthly withdrawals.
