Former Morgan Stanley co-president Zoe Cruz has told investors that she is closing the hedge fund she started two years ago, after it was hobbled by disappointing performance and failed to attract as many investors as she had hoped, said people familiar with the matter.

Cruz, who was ousted from Morgan Stanley in 2007 after high-profile mortgage bets soured and she clashed with some peers, started marketing her start-up New York hedge-fund firm, Voras Capital Management, in late 2009. Early on, she discussed plans to open offices in London and Asia, The Wall Street Journal reported at the time. Voras started trading in mid-2010. But her name recognition wasn't enough to attract new investors, and she never raised much beyond about $200m, say people familiar with the matter. Her plans to liquidate the hedge fund were earlier reported by Reuters. Cruz didn't immediately respond to a request for comment.