Hedge Funds

Deephaven's buyback the latest sign of challenges in permanent capital


Deephaven Capital Management in September became the latest U.S. hedge fund firm to indicate it planned to repurchase some of its freedom, providing still more evidence that managers need to think hard about choosing which model to follow in the pursuit of so-called permanent capital - and that "permanent" can be a misnomer for such deals.

In a letter to investors, Deephaven said it was "preparing to potentially acquire a significant stake" in itself by exercising the option it obtained last December from 100% owner Knight Capital Group to execute a management buyout of as much as 49% of