Soros’s Money Manager Warns Recession ‘Inevitable’ But Market Timing Is OffAdvisor Perspectives
Despite the massive selloff in equities this year and persistently high inflation, Dawn Fitzpatrick isn’t worried about a recession in the immediate future.
The chief executive and chief investment officer of Soros Fund Management argues the US consumer is in “extraordinarily” good shape, which will help the economy weather the Federal Reserve’s expected rate hikes. And while wage growth isn’t keeping up with inflation, Americans are still flush with enough cash to pay down their credit card balances.
“Rate increases will slow the economy and will impact inflation, but this economy has some shock absorbers built in,” Fitzpatrick, 52, said in an episode of “Bloomberg Wealth with David Rubenstein.”
As head of George Soros’s family office, which started life as a hedge fund in 1970, Fitzpatrick oversees about $28 billion. Most of that money is part of the 91-year-old billionaire’s Open Society Foundations, which fund causes including human rights, justice and progressive politics.
The beauty of the family office, Fitzpatrick said, is that she can stay nimble and scale up her bets when necessary, whether that’s $100 million or $500 million, sometimes making decisions on fleeting opportunities in a matter of hours.
“We can do things faster and in a bigger size than almost any other investor,’’ she said in the interview taped April 29. “There’s pools of capital that are massively larger than us, but they tend to have a process that could take weeks or months.”
What’s more, the breadth of the firm’s operations means Fitzpatrick can seize upon opportunities across the globe. “Because we can invest across any asset class in almost any geography, we can really connect the dots and operate in the spaces in between where the typical asset management industry can go.”
Prior to joining Soros, Fitzpatrick spent about 25 years at UBS Asset Management, including as head of investments. She enjoyed it, but faced more regulatory constraints as part of the publicly traded bank, she told Rubenstein, co-founder of investment firm Carlyle Group Inc.
Fitzpatrick started her career at options trading firm O’Connor & Associates, which became part of UBS. She made her name there during the collapse of Long-Term Capital Management in the late 1990s, when she made “a lot of money” trading convertible bonds. It was there that the bank tried to convert her — the only female trader in the unit — into a salesperson until a trusted adviser warned her against it.
“You are a natural investor — and you’re not that charming,’’ she recalled them saying.
Fitzpatrick grew up in Irvington, New York, a small town about 20 miles north of New York City on the Hudson River. She went to the University of Pennsylvania’s Wharton School where she ran track “kind of like Forrest Gump,” she said. “I wasn’t fast, but I could run a really long way.”
She continues to run almost every day and has three teenagers who also want to be investors.
Fitzpatrick spoke with Rubenstein about the role of family offices in investing, her outlook on crypto and SPACs, and why the industry needs more diversity.
The interview has been edited and condensed.