The $1.8 trillion private credit market is facing a critical liquidity test as Morgan Stanley (NYSE:MS) and BlackRock Inc. (NYSE:BLK) move to restrict investor withdrawals, though industry experts tell Benzinga these “gates” are functioning as a structural “stabilizer” rather than a sign of collapse.

The Gating Wave Hits Morgan Stanley

Morgan Stanley became the latest Wall Street giant to curb redemptions after investors sought to withdraw nearly 11% of shares from its North Haven Private Income Fund (PIF).

Adhering to its quarterly limit, the fund fulfilled only 45.8% of those requests. This follows a similar move by BlackRock, which limited withdrawals from its $26 billion HLEND fund after redemption requests hit 9.3% of net asset value.

While these restrictions have rattled some investors, proponents argue that these measures are necessary. Louis Navellier, CIO of Navellier & Associates, notes that ...