Only days after Ellington Financial LLC (Ellington), run by Michael Vranos’ hedge-fund firm, Ellington Management Group, LLC (Manager), filed a prospectus with the SEC announcing a planned initial public offering (IPO) to raise cash in order to purchase mortgage-backed bonds, Ellington suspended the IPO due to “market conditions.”  The IPO was premised on the idea that investors would be willing to purchase Ellington shares at a premium, an average of $26 per share, 6.1 percent more than the value of its net assets, or 1.06 times Ellington’s shareholder equity, so that Ellington could invest in potentially underrated home loans in the recovering United States housing market.  While the IPO has ceased, its mechanics and the risk factors discussed in the Ellington prospectus remain particularly interesting for hedge fund managers contemplating a similar issuance of shares to obtain so-called “permanent capital” for the purpose of investing in designated assets.  This article summarizes the material terms and provisions of the Ellington prospectus and the suspended IPO.