Career & Success

Zoe Cruz: Being Shoved Out of Your Comfort Zone Has Advantages

Now running her own hedge fund, the ousted Morgan Stanley executive says forced change opens doors.

May 15, 2010

| by Michele Chandler

Zoe Cruz, once one of the most powerful and highly paid women on Wall Street before her sudden ouster from investment bank Morgan Stanley in 2007, has a whole new agenda these days.

Following two years on hiatus from the business world, Cruz has resumed her pursuit of finance by establishing her own international hedge fund, Voras Capital Management, which focuses on distressed assets and macroeconomic bets on currencies and securities.

She is frequently asked to describe her spectacular rise through the ranks at Morgan Stanley, where she spent her entire 25-year finance career, and tell how she thrived in the male-dominated culture of bond trading. But, during her keynote address at the Women in Management banquet at Stanford GSB on May 5, Cruz also spoke openly about the many personal challenges she has faced.

“Not many leave the comfort of the known voluntarily. Most, including me, need a good shove,” Cruz told the mostly female group sponsored by the MBA Women in Management club. She added: “But these periods of being shoved outside my comfort zone were the ones that helped me grow the most as a person.”

To hear Cruz tell it, three difficult life experiences transformed the former Zoe Papadimitriou “from a shy, quiet girl to the aggressive, take-no-prisoners ‘Cruz Missile,’” her moniker at Morgan Stanley because of her competitive zeal and ferocious management style.

Cruz told the MBA group she’s had plenty of knocks, starting when she moved from Greece to the United States with her family at age 14. She recalled being “thrust into a very foreign new world of thick accents and strange clothes. All I remember of those days was how miserable and homesick I was.” But, over time, she said, a “fortune of learning and growth came about as a result. Living in such a dramatically different setting enables you to open your mind to the richness of alternatives.”

The second blow was the death of her 17-year-old brother in a car accident. The two were born just 11 months apart and were especially close. Cruz called his death “a crushing loss that taught me the value of life.”

The third major “shove” she experienced was being fired from Morgan Stanley by her one-time supporter, company chairman and CEO John Mack.

Her high profile dismissal came just three years after Forbes magazine had named the ambitious financier who oversaw a trillion dollar balance sheet number 16 on its list of the 100 most powerful women in the world and prompted considerable debate in the industry about the fate of othe women seeking top Wall Street careers.

Cruz had joined Morgan Stanley in 1982, shortly after earning her MBA from Harvard Business School. After helping to launch the company’s foreign exchange business and turning it into one of the firm’s most profitable operations, Cruz in 2005 became co-president of Morgan Stanley, responsible for institutional securities and wealth management.

She had been considered a possible successor to Mack. However, her luster dimmed after an aggressive push into high-risk areas including subprime mortgages and loans to private equity funds resulted in a $3.7 billion loss at Cruz’s unit and ensuing power struggles.

After leaving Morgan Stanley, Cruz withdrew from the business world to concentrate on charity work, including the Harlem Children’s Zone, a nonprofit providing education and social service programs for children in New York; the Harvard College Dean’s Council; and, until recently, the Lincoln Center Board of Directors.

She reentered the finance world late last year with the founding of Voras Capital Management, a company named for both the Greek word for north and a mountainous area near the small town in Greece where Cruz was born.

Despite the world’s economic turmoil, Cruz remains optimistic about the future citing the success of firms such as computer maker Apple. “There are a lot of companies that are making a lot of money,” she said. “I still have money in the equity markets.”

Cruz also has faith that more women will ascend the Wall Street ranks. She says she supports a quota system in proportion to their presence in MBA schools to ensure the advancement of women and minorities in finance.

She told the young MBAs in the audience about the tradeoffs she made to balance her ambitious career with caring for a family — she’s married to financier Ernesto Cruz and the couple have three children. One significant choice was deciding to specialize in trading because of its more regular hours. “If you’re the most profitable trader on the desk,” she discovered, “they don’t care if you have three heads, you can go home.”

Looking around the room at the dozens of banquet attendees, she said, “I salute you. I know the world will be a much better place as young women assert themselves, not just in the business world, but in the global arena.”

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