Mark Lennihan/APThe famed financial crisis-era bank analyst Meredith Whitney made a big bet on the US heartland - and it didn't work.
Back in June 2013, Whitney predicted that the US heartland was the next major source of growth. Her American Revival Fund proceeded to invest in heartland stocks in November 2013, reports Bloomberg's Max Abelson.
However, "even as parts of the region did well, she made wrong-way bets on companies including a retailer that sells mattresses and stereos on credit in Texas," he reports.
Whitney's fund presentation listed 16 heartland states, and predicted that the region's growth over the next decade will be twice the national average. However, over the firm's first 14 months in operation this was not the case.
Additionally, Abelson reports that Whitney ran her firm "without deputies dedicated to analyze the stocks she thought would rise and fall," and she apparently told colleagues "that investors bought in for her ideas and wanted her doing research."
Whitney made a name for herself during the financial crisis when she correctly predicted that Citigroup would be forced to cut its dividend.
She also predicted hundreds of billions of dollars of municipal bond defaults in 2010 - but that never happened.
In late December, it was reported that a hedge fund connected to Michael Platt's BlueCrest Capital Management is suing Whitney's American Revival Fund. Back in October, the fund was asking for its money back.
Furthermore, her firm was down 11% through December, her Madison Avenue office is reportedly on the market, and the hedge fund's CEO Brittani Caetano and SAC Capital veteran and cofounder Stephen Schwartz have left the firm.
To get all the details, check out the fulls story on Bloomberg.