Cruz Called It Quits After Morgan Stanley Redemption

May 11 2012 | 12:27pm ET

Three years after kicking her to the curb, Morgan Stanley helped get Zoe Cruz back on her feet, pledging $20 million to her new hedge fund. Two years later, it's helping put her back out on the street.

Cruz told clients yesterday that she would close her Voras Capital Management, citing the "difficult capital-raising environment for new funds and the enormous uncertainty and volatility in the markets." But it wasn't just capital raising that Voras found difficult; it was capital retaining.

Voras's assets had already dropped from $200 million at launch to $90 million earlier this year. That figure was to shrink even further, however: Morgan Stanley asked for its $20 million back last month.

The bank, which Cruz was once tipped to lead as CEO, was disappointed both with Voras' performance—the hedge fund lost 8% last year—and its fundraising failures and shrinking size. The redemption also formed part of Morgan Stanley's plans to cut its risk by selling off some assets, The Wall Street Journal reports.

Former Morgan Stanley CEO John Mack fired Cruz in 2007 after a desk she oversaw lost $4 billion in the subprime mortgage market collapse. But two years later, Mack had lunch with Cruz and decided he wanted to help her launch Voras.

"She's been an outstanding trader and made money for the firm," Mack told the Journal. "Her track record was a very good track record."


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note