Meredith Whitney raising money for new hedge fund: sources

NEW YORK Wed Oct 9, 2013 6:06pm EDT

Meredith Whitney, CEO, Meredith Whitney Advisory Group LLC, participates in the Reading the Tea Leaves: Investing for 2010 and Beyond panel at the 2010 Milken Institute Global Conference in Beverly Hills, California April 28, 2010. REUTERS/Danny Moloshok

Meredith Whitney, CEO, Meredith Whitney Advisory Group LLC, participates in the Reading the Tea Leaves: Investing for 2010 and Beyond panel at the 2010 Milken Institute Global Conference in Beverly Hills, California April 28, 2010.

Credit: Reuters/Danny Moloshok

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NEW YORK (Reuters) - Analyst Meredith Whitney, who rose to prominence for a prescient call on Citigroup's mortgage troubles in the lead-up to the financial crisis, is launching a hedge fund, two sources familiar with the matter and regulatory filings said on Wednesday.

Whitney is raising money for a long/short equity hedge fund, according to the sources who are not authorized to speak publicly about the matter. Those types of funds bet on stocks rising or losing value. It could not be determined how much capital Whitney has raised so far.

The hurdles to starting a hedge fund have increased in recent times due to more onerous regulatory requirements put in place since the financial crisis.

The new fund is called Kenbelle Capital LP, according to an April regulatory filing with the New York State Division of Corporations.

Regulatory filings with the Financial Industry Regulatory Authority also show Whitney requested to deregister her Meredith Whitney Securities LLC brokerage on August 28.

Whitney did not respond to a call to her Madison Avenue office.

News of Whitney's new fund and the shuttering of her brokerage business was first reported by Bloomberg on Wednesday.

Whitney rose to fame on the eve of the financial crisis when she issued a research report saying that Citigroup would have to slash its dividend, raise capital, sell assets or all three because of mounting losses from its mortgage holdings.

In 2010 Whitney started to predict a wave of municipal bankruptcies across the United States, but that has not come true despite some notable municipal bankruptcies.

(Reporting by Katya Wachtel, Matthew Goldstein, Jennifer Ablan and Richard Chang)

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