A US hedge fund manager is being sued in a $46 million Bermuda court case by a billionaire investor.

Meredith Whitney, who is married to Bermuda resident ex-WWE wrestler and TV pundit John Layfield, has been taken to court by billionaire Michael Platt.

Mr Platt’s BlueCrest Capital Management went to court in a bid to get back its stake in Ms Whitney’s American Revival Fund.

Ms Whitney’s hedge fund slipped 11 per cent this year up to November, despite a rising stock market.

Ms Whitney’s lawyer Stanley Arkin told Bloomberg News: “A lawsuit was filed in Bermuda, contrary explicitly to a contractual agreement that any lawsuits or legal disputes would be resolved here in New York.”

And — when asked what sparked the redemption demand — Mr Arkin referred to BlueCrest’s own returns and client withdrawals.

Mr Arkin added: “I will tell you she feels insulted. She really feels offended.”

BlueCrest declined to comment on the legal action.

Ms Whitney, who shot to fame as a Wall Street analyst when she warned that US banking giant Citigroup was in financial trouble a year before the 2008 global financial crisis, started a new firm, Kenbelle Capital, with help from Mr Platt, a British investment manager who lives in Switzerland, in 2013.

The BlueCrest fund invested $50 million in Kenbelle in November that year, but asked to redeem its stake in October this year with a payment deadline in November.

BlueCrest said that the request had been accepted by a Kenbelle executive — but that the expected payout date had passed.

The legal action, which claims American Revival violated agreements, does not name Ms Whitney or any Kenbelle executives and wants the return of its stake along with costs and other relief.

Ms Whitney, who is said to be spending much of her time in Bermuda, aimed for returns of 12 to 17 per cent from her fund by profiting from what she called “America’s heartland”, according to a presentation last year.

But the fund was down in eight of the past 11 months, according to its returns, while the Standard & Poor’s 500 Index climbed around 12 per cent over the same time period.

The move by BlueCrest took place in a tough year for fledgling money managers, with institutional investors preferring the biggest players and hedge funds shutting down at a rate not seen since the start of the financial crisis.

On average, hedge funds returned about two per cent during the year’s first 11 months, according to Bloomberg statistics.

Top executives at Kenbelle, including the chief financial officer and a co-founder, have left the firm and its offices in a high-rise on Manhattan’s Madison Avenue is listed for sublease.