Earlier this week, it was announced that Zoe Cruz would be closing her hedge fund, Voras Capital Management. Cruz started the fund in 2010, a few years after she was famously fired by John Mack at Morgan Stanley (where she was co-President), for reasons that remain unclear to this day but include theories like: a) the belief that she was responsible for losing the firm a few billion dollars b) a lot of people disliked her-- including this guy named Vikram Pandit who was "not a fan"-- and told Mack they would leave if he made Cruz CEO c) Mack had to blame either himself or Cruz for some losses and he chose her. d) She was, you know, a girl, and the boys didn’t like that. Regardless, the ousting was probably mildly to majorly humiliating for ZC and since Mack-- who she was extremely close with prior to the personnel change-- was the one who told her to hit the bricks, it would have been fair to assume she spent a least a little time fantasizing about sticking pins in a Mack voodoo doll and/or slashing his tires.
In 2009, though, Mack and Zoe had lunch and she told him she wanted to start a hedge fund. And maybe it was it was the fact that he was feeling nostalgic, maybe it was the fact that tragedy + time = comedy, maybe it was the fact that he was still riding high from "saving" Morgan Stanley, maybe it was the wine, maybe it was that he was feeling bad about the unceremonious canning and thought "Oh, why not just give the poor girl some money" but Mack went back to the office and "told bank executives that he would like to help her start her new investment business, according to people familiar with the matter." And when they said, "But John, didn't you fire her for supposedly taking on too much risk and losing the firm $4 billion," he said "[Well], her track record was a very good track record." So Morgan Stanley gave Cruz $20 million and she was on her way. And while we can't say for sure, and we're not suggesting money necessarily heals all wounds, the $20 million and the stamp of approval and the fact that she could say to investors she was trying to raise money from ,"Hey look, even the guy who fired me wants in" probably helped smooth things over and improve MS's standing in the Cruz-missile's eyes. She likely even had nice things to say about her former employer at social gatherings! And then this happened:
Last month, Morgan Stanley asked for its money back, disappointed by the hedge fund's performance and worried about the shrinking size of Ms. Cruz's firm, according to people familiar with the matter...The retreat by Morgan Stanley was part of broader moves to sell off assets that Chief Executive James Gorman felt exposed the company to unnecessary risk or otherwise didn't serve clients, the people said...On Thursday, the 57-year-old Ms. Cruz told clients in a letter that she has decided to close down Voras Capital Management. The letter cited "the difficult capital-raising environment for new funds and the enormous uncertainty and volatility in the markets," according to a person who saw the letter. It was signed by Ms. Cruz.
Oooo, that's not good. In fact, it's worse than if they'd never given her the $20 mill at all. But to give and take back? Yikes. All those nice things Cruz said about MS and Co? Strike them from the record because this is soooo over. Don't call, don't write, don't cry, don't beg, and definitely don't offer her a job because 'cause you're finished. OFFICIALLY. FOR GOOD.