October 31, 2008
Another Minnesota-Based Hedge Fund Ceases Redemptions
Deephaven Capital Management has joined Whitebox Advisors in announcing that withdrawals from certain hedge funds have been halted. According to the article, investors sought to pull about 30 percent of approximately 1.6 billion invested in the two funds. The article continues and quotes from an SEC filing by Knight Capital:
Minnetonka-based Deephaven apparently is unable to come up with the money to cash out investors who have soured on the fund’s strategies or otherwise need the money. In the SEC filing Thursday, Knight said the boards of Deephaven’s Global Multi-Strategy Funds, known as “GMS Onshore Fund” and “GMS Offshore Fund,” concluded “that it would be in the best interests of all investors … to suspend redemptions and withdrawals, effective immediately, in an effort to protect investors from being disadvantaged by the combination of the current extreme and unprecedented market conditions, the sudden and material industry-wide changes in margin and financing requirements … along with pending redemption requests.”
Two reports in less than a week.