Deephaven’s Euro Hedge Funds Shine In A Down Year

Jan 6 2009 | 11:37am ET

Deephaven Capital Management’s European Event Driven Fund weathered the hedge fund storm last year even as some of its other hedge funds struggled with drawdowns and redemptions.

The fund’s rookie USD onshore and offshore share classes returned 17.47% and 15.84%, respectively, through November. Its euro share class, which launched in June 2007, was also up, gaining 15.45% for the year. All three classes combined managed $436.88 million in assets as of the end of November.

One of the primary strategies pursued by the fund is merger arbitrage, according to fund documents. It also invests in special situations such as reorganizations, liquidations and/or spin-offs. Tony Chedraoui, a former director at Lehman Brothers, is the fund’s portfolio manager in its London office.

On Oct. 30, Deephaven said it suspended redemptions and withdrawals from its Global Multi-Strategy Funds, which as of Oct. 1 had assets of nearly $1.6 billion, because of aggregate redemption requests through Jan. 31 that totaled approximately 30% percent of the assets under management. The firm also suspended redemptions in the International Volatility Strategies Funds, which managed approximately $70 million as of Oct. 1, because of aggregate redemption requests through Jan. 31 that totaled approximately 63% of that fund’s total assets.

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