Morgan Stanley, Cliffwater Cap Withdrawals as Private Credit Funds Face Redemption Surge

• Morgan Stanley and Cliffwater LLC have capped withdrawals from their multibillion-dollar private credit funds.
• This action follows investor attempts to redeem significantly more than the funds permitted, signaling a surge in redemption demands.
• Cliffwater's $33 billion fund restricted redemptions to 7%, while Morgan Stanley's $8 billion fund returned less than half of demands, limiting to 5%.
• The moves highlight mounting worries about the quality of private credit loans, especially to software firms, and the market's capacity to handle a rush for exits.
• BlackRock Inc. also restricted withdrawals, and JPMorgan Chase & Co. is limiting lending to private credit funds due to lowered asset values.