Eurodollar University HOLY SH*T! Now its Morgan Stanley...
Mar 13, 2026
Massive withdrawals and funds refusing redemptions in private credit spark panic. Banks revaluing collateral tightens lending and strains system liquidity. Comparisons to 2007–08 surface, with oil shocks and leverage highlighted. Policymaker misreads and looming job losses add to the list of systemic risks.
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Private Credit Runs Echo 2008 Fragility
- The current private credit withdrawals and fund gating echo 2007–2008 dynamics where shadow banking fragility preceded a larger monetary breakdown.
- Jeff Snider links recent fund redemptions at BlackRock, Blue Owl, Cliffwater and now Morgan Stanley to an emergent systemic liquidity squeeze.
Cliffwater Run And Manager Gating
- Cliffwater's $33 billion private credit fund faced 7%+ redemption requests and then refused to honor most requests, mirroring how other managers gated investors.
- Jeff Snider describes managers closing redemptions, forcing investors to remain in funds they want to exit.
Morgan Stanley Gating Reveals Liquidity Mismatch
- Morgan Stanley's North Haven fund faced ~11% redemptions but honored only 5% per contractual limits, revealing liquidity mismatch in private income products.
- Snider emphasizes funds can't pay large redemptions without selling assets because high returns depended on illiquid deployment.