Why Morgan Stanley Stock Sank by 4% Today

By Eric Volkman – Mar 12, 2026 at 7:52PM ESTKey PointsThe financial services giant's investment management arm imposed a limit on redemptions from a private credit fund.Market players are worried that private credit providers are more risky than previously thought.Something close to a crisis is unfolding in the world of private credit, and on Thursday, Morgan Stanley's (NYSE: MS) stock was affected. On news that its investment management unit capped withdrawals from one such fund, investors bailed on Morgan Stanley shares, leaving them with a nearly 5% loss that trading session. Private panic Late on Wednesday, Morgan Stanley's North Haven Private Income Fund (PIF) sent its unit holders a letter notifying them of the new cap. Specifically, the fund wrote that it will limit tender requests to 5% of all units outstanding, as of the count last Dec. 31. This followed the fund returning around $169 million to its unit holders in redemptions already this quarter, for about 45.8% of the total requested. Image source: Getty Images. Although that cap is a standing rule of the fund, it was the latest in a series of crisis moments for the private credit industry. Last month one of Blue Owl Capital's funds unexpectedly made a similar move following a fraud investigation into auto parts specialist First Brands Group. That company was supported by private credit. All of this has caused a stir in that world, with investors in such funds rushing to redeem their units and shares. Reuters quoted Morgan Stanley as saying that North Haven had investments in 312 borrowers in 44 industries as of the end of January. It claimed, in the news agency's words, that "credit fundamentals at the fund remain broadly stable." ExpandNYSE: MSMorgan StanleyToday's Change(-4.18%) $-6.72Current Price$154.17Key Data PointsMarket Cap$255BDay's Range$152.85 - $156.2152wk Range$94.33 - $192.68Volume682KAvg Vol6.9MDividend Yield2.44% No need to press the red button... yet Morgan Stanley is a large, complex, and sprawling financial services company, so North Haven's travails aren't going to short-circuit the entire company. That being said, Morgan Stanley's success is due in no small part to its reputation as an effective and clever operator throughout the finance ecosystem, so North Haven's move (and its exposure) isn't making it look very sharp just now. All the same, I wouldn't sell Morgan Stanley stock if I were an investor; for now, the private credit rout is a challenge it can overcome.Read NextFeb 23, 2026 •By Rich SmithWhy Morgan Stanley Stock Dropped on MondayFeb 20, 2026 •By Bram BerkowitzHere's How Morgan Stanley Beats the Market From HereJan 15, 2026 •By Eric VolkmanWhy Morgan Stanley Stock Was Cruising Higher on ThursdayOct 13, 2025 •By Courtney CarlsenThe Best Blue Chip Stocks to Buy With $2,000 Right NowSep 13, 2025 •By Courtney Carlsen1 Green Flag for Morgan Stanley Stock Right NowApr 11, 2025 •By Motley Fool Markets TeamMorgan Stanley: Q1 EPS Beats EstimatesAbout the AuthorEric Volkman is a contributing Motley Fool finance and stock market analyst. Previously, Eric was an equities analyst at European investment bank Raiffeisen Capital and Investment. He’s also been a freelance finance writer since 1995. He studied at Susquehanna University.TMFVolkmanStocks MentionedMorgan StanleyNYSE: MS$154.37(-4.05%)-$6.52Blue Owl CapitalNYSE: OWL$8.61(-4.54%)-$0.41*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.