Deephaven Capital Management’s fee income fell for a fourth straight quarter, causing parent Knight Capital Group to miss analysts’ profit estimates.

Minnetonka, Minn.-based Deephaven—which analysts had expected to benefit from market volatility—posted a pre-tax loss of $7.9 million in the second quarter. During the same period last year, it earned $6.3 million. Assets under management have fallen 21%, to $3.3 billion, from the year-earlier period. Its hedge funds have posted an average loss of 5.4% for the year.

Jersey City, N.J.-based Knight said net income climbed 20% on the quarter to $29.4 million, not enough to overcome the bad news from Deephaven. Knight’s profit was 32 cents per share, 2 cents shy of analysts’ expectations.