Zoe Cruz, the Morgan Stanley ( MS) co-president pushed out by the firm late last year, is eyeing a role at an asset management firm, or possibly raising money to start a hedge fund, according to a person familiar with her thinking.

Cruz would prefer to join an existing business, as she enjoyed being a high-level manager at a large prestigious firm, the person says. The Greek native was seen as a possible successor to CEO John Mack after spending her entire 25-year career at Morgan Stanley, starting as a foreign exchange trader, until her exile last year. She was shown the door following heavy losses in Morgan Stanley's fixed income division, which she oversaw.

A spokeswoman for Cruz declined to comment.

Executives at Swiss bank UBS ( UBS), which has made several key hires in recent weeks, considered offering Cruz a role there, but she was not interested, according to the person close to her. It was not clear what the role might have been, but no formal discussions took place, according to the person.

Two UBS executives say they are not aware of any talks, but would not discount the possibility that informal overtures were made.

Even though hedge funds have been closing down and suffering from performance issues amid the credit crisis, raising money for a new one is possible, says Adam Herz, President of Hunter Advisors, an executive search firm that does lots of work for hedge funds.

"There's a higher bar and much more scrutiny, but what we should be expecting is a significant amount of reallocations from funds that are closing into new or existing funds," Herz says, adding that one advantage to raising a fund now is that there are plenty of talented executives available.

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