Ivory Investment Management has split from hedge fund FrontPoint Partners, a development that could bolster Morgan Stanley's plans to obtain a savvy money manager to help supplant its spoiled bid to acquire BlackRock, The Wall Street Journal reports.

Even before Morgan Stanley Chief Executive John Mack began his pursuit of BlackRock, the $450 billion fixed-income manager scooped up by Merrill Lynch last month, he expressed a desire to augment the New York banker's asset management unit with alternative investment expertise. Mack wants a bigger piece of the hedge fund industry, a potentially lucrative business that caters to the wealthiest investors.

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