- Soros Fund Management CIO Dawn Fitzpatrick is preaching patience for investors.
- Speaking at Robin Hood’s annual conference, Fitzpatrick said Soros is rebuilding its cash reserves.
- She called late-stage private companies overvalued, partially thanks to the SPAC boom, and said large-cap tech stocks are trading cheaply.
- See more stories on Insider’s business page.
The woman who manages the fortune of one of the world’s richest men said she recommends steering clear of late-stage private companies and thinks large-cap tech companies are a strong long-term investment.
Dawn Fitzpatrick — the chief investment officer for Soros Fund Management, which runs billionaire George Soros’s vast fortune — said that while March of 2020 was a time for action, June of 2021 is a time for patience. Speaking at the New York poverty-fighting charity Robin Hood’s annual conference Wednesday, Fitzpatrick said Soros is in the process of rebuilding its cash reserves after putting money to work last spring when the pandemic shut down the global economy.
The $27 billion manager made 30% last year, according to Bloomberg, thanks to aggressive moves in the equity markets last spring.
Insider was told about Fitzpatrick’s comments by an individual who attended the virtual conference, which attracts some of the biggest names in finance but is closed to the press. Fitzpatrick made the comments during a panel discussion alongside Bridgewater Associates’ co-chief investment officer Greg Jensen and One River Asset Management CEO and CIO Eric Peters. Billionaire Paul Tudor Jones, a longtime Robin Hood backer, moderated the session.
Fitzpatrick said some assets have over-the-top valuations. Late-stage private companies in particular are overvalued, partially due to the
boom, she said. Desperate SPAC sponsors, she said, are giving attractive terms to investors who buy into the PIPE funding, which sponsors often need to close mergers. These investors who buy into the PIPE fundraising have enormous leverage, she said.
Fitzpatrick, who is a macro investor, said the
‘s decision to continue its policy of low rates is worth the possible inflation risks at the moment. While the yield curve looks healthier, according to Fitzpatrick, there are real short-term economic risks, especially as states opt out of the expanded federal unemployment benefits.
Still, the building debt and reliance on low-interest rates will eventually have some effect, she said, which could hurt the value of the US dollar. The dollar’s status as the reserve currency of the global financial system is something the Fed and other policymakers are taking for granted, she said.
When asked by Tudor Jones what she would pick to invest in and hold for the next ten years, she picked large-cap tech companies, which she thinks are currently trading cheaply.
Soros declined to comment on the remarks.