Economy

Funds Restrict Withdrawals, Raising Risk Concerns About Private Credit Market

Most analysts see no immediate systemic threat from private credit stress but warn a sharp pullback could tighten corporate funding.
Funds Restrict Withdrawals, Raising Risk Concerns About Private Credit Market
The Morgan Stanley worldwide headquarters building in New York on Oct. 21, 2009. Timothy A. Clary/AFP via Getty Images
Panos Mourdoukoutas
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Concerns about the stability of the fast-growing private credit market mounted last week as more investment funds restricted investor withdrawals, contributing to volatility on Wall Street.

Morgan Stanley revealed in a letter to investors on March 12 that it had limited investor withdrawals from its $8 billion non-traded business development company, North Haven Private Income Fund LLC, causing its stock to fall by more than 4 percent following the news.

Panos Mourdoukoutas
Panos Mourdoukoutas
Author
Panos Mourdoukoutas is a professor of economics at Long Island University in New York City. He also teaches security analysis at Columbia University. He’s been published in professional journals and magazines, including Forbes, Investopedia, Barron's, IBT, and Journal of Financial Research. He’s also the author of many books, including “Business Strategy in a Semiglobal Economy” and “China's Challenge.”