Wednesday, 20 August 2014
Last updated 51 min ago
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."
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note