* Ellington pulls IPO due to market conditions-underwriter

* Had planned to sell 7.7 mln shares, pricing at $25-$27

NEW YORK, Dec 10 - Specialty finance company Ellington Financial LLC pulled its initial public offering on Thursday due to market conditions, according to an underwriter.

The Connecticut-based company acquires and manages mortgage-related assets, and is currently targeting residential mortgage-backed securities, mortgage-related derivatives, and derivatives on corporate debt and equity securities.

Ellington had hoped to sell 7.7 million shares and had expected them to price between $25 and $27, a piece. The company said in a filing with the U.S. Securities and Exchange Commission that it would use the proceeds for acquisitions.

Ellington Financial had $10.1 million in net investment income in the nine months ended Sept 30, 2009, up 5.1 percent from a year ago. The company reported a net increase in shareholders' equity from operations of $80.5 million, up 523.4 percent from a year ago.

The offering was being led by Credit Suisse and Deutsche Bank. They had the option to buy an additional 1.155 million shares. (Reporting by Clare Baldwin; editing by Carol Bishopric)