Here's what Wall Street's saying about a star exec's sudden exit and his massive payout

This is the kind of news that sends whispers flying around Wall Street.

Michael Novogratz, the CIO of Fortress Investment Group's macro fund, will step down at the end of this year. His $2.3 billion fund will also shutter, and assets will be returned to investors.

This is no small thing in hedge fund land.

In an industry of personalities, Novogratz was one impossible to ignore.

He was outspoken about his love for wrestling and investing, unafraid to share his views on politics, and often accompanied by two of his brothers who also work on The Street.

His departure is the culmination of two incredibly difficult years for Fortress' macro fund. Not that Novogratz will leave the firm empty handed - he'll receive a $255 million payout package.

And if you ask a lot of people on the Street, that package is well-deserved. The collective word is that he helped make Fortress into the $72 billion behemoth it is today.

Novogratz said in a statement Tuesday: "This was a difficult decision given my confidence in both the research positions we hold and the talent of our team. But we have had an extremely challenging two years, and I do not believe the current environment is conducive to achieving our best results.

"The recent past does not negate years of hard work and achievement. It has been a rare privilege to lead the Macro team and to serve as a Principal at Fortress."

The face of Fortress

"Novogratz was the face of Fortress for many years so I know people are shocked," said one hedge-fund executive. "But I think the sentiment was 'it's a long time coming.' Fortress has turned into private equity with a taste of credit. The [hedge fund's] liquid macro strategies seemed misaligned with the firm's objectives."

True, the Novogratz-controlled hedge fund was only a slice of Fortress' assets under management, but it was a piece on fire. Investors redeemed $800 million from the fund at the end of Q4 2014 - a quarter of its total assets.

More redemptions followed throughout the year as key bets, like Novogratz's long call on Brazil, went sour.

Regardless of their success, though, Novogratz's calls were the ones that packed conference rooms and made headlines. That's left a lot of Wall Street wondering about what Fortress' focal point will be from now on.

"The credit business is probably doing fine but it will be a tough time for credit guys [in general] going forward," mused one banker who has worked with the firm in the past.

Another hedge fund veteran was more clear: "Their focus is now on direct lending, nothing else."

"They will have a very tough time raising money because they lost so much. It's gotten very institutional but losing money fast and public markets can put them in a liquidity squeeze."

Plus, there's the fact that the firm now has to replace a face - and those are not easy to come by.