At a glance
- Unitholders of the smaller fund will receive newly issued Class I units of the surviving fund based on each fund's NAV per unit at closing.
- Advisers placing the fund in advisory accounts will get a unit class without the 0.85% servicing fee, on a base fee 25 basis points below today's 1.25%.
- The incentive fee is unchanged at 12.5% of income above a 5% annualized hurdle, and the funds project pro forma operating expenses of about 40 basis points for the combined fund.
Morgan Stanley's North Haven Private Income Fund agreed to absorb North Haven Private Income Fund A and cut the base management fee to 1% of net asset value from 1.25%, the funds said Oct. 26.
Unitholders of the smaller fund will receive newly issued Class I units of the surviving fund based on each fund's NAV per unit at closing. At Sept. 30 values, each unit of the smaller fund converts into about 1.11 units of the surviving fund, according to the funds' monthly updates. The smaller fund held $288.7 million of estimated aggregate NAV and $317.1 million of debt at Sept. 30, against about $2.95 billion of NAV and $2.88 billion of debt at the surviving fund.
Advisers placing the fund in advisory accounts will get a unit class without the 0.85% servicing fee, on a base fee 25 basis points below today's 1.25%. The 1% base fee takes effect Jan. 1, 2027, and the merged fund will offer both unit classes across brokerage and advisory channels. The surviving fund today sells only Class S units, which carry a 0.85% servicing fee. The smaller fund sells only Class I units, with no servicing fee.
The incentive fee is unchanged at 12.5% of income above a 5% annualized hurdle, and the funds project pro forma operating expenses of about 40 basis points for the combined fund. Morgan Stanley will pay up to $1.5 million of the merger's expenses.
Both boards, including all independent directors, approved the agreement. The funds expect to close in December subject to regulatory approvals including Hart-Scott-Rodino clearance. Unitholder votes are not required, and the transaction is intended to be tax-free. AltsWire first reported the terms.
On a pro forma basis as of June 30, the combined fund would hold $6.6 billion of investments across about 312 portfolio companies, and about 99% of the smaller fund's gross investment commitments already overlap with the surviving fund's. The funds said the combined vehicle would carry BBB- from Fitch, Baa3 from Moody's and BBB from KBRA. The smaller fund is currently unrated.
Advisory-account fees fall by more than half
Annual fund fees, % of NAV: base plus servicing, current vs Jan. 1, 2027
- Base management fee
- Servicing fee
Show as table
| Label | Base management fee | Servicing fee | Total |
|---|---|---|---|
| Current | 1.25 % of NAV | 0.85 % of NAV | 2.1 % of NAV |
| From Jan. 1, 2027 | 1 % of NAV | 0 % of NAV | 1 % of NAV |
| Fund | NAV, Sept. 30 | Debt, Sept. 30 | Unit class | Servicing fee |
|---|---|---|---|---|
| North Haven Private Income Fund | ~$2.95 billion | $2.88 billion | Class S | 0.85% |
| North Haven Private Income Fund A | $288.7 million | $317.1 million | Class I | None |
Reported by the Distribution desk from AltsWire. Published . Corrections