YouSaid · the spoken record

Dawn Fitzpatrick

lines on the record: 73
first: 2019-11-04
most recent: 2019-11-04
sittings or episodes: 1
sources: podcast

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“They never let us quit at anything. It definitely stuck with me. I came from a super kind of athletically and academically competitive family. And as I mentioned, I am the runt of the litter. So you had to be, I had to be tenacious.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So there is a web scraper called the browser, and they curate five articles a day from really diverse set of magazines and newspapers, and you can't help but read it and learn something that you would otherwise never know.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“People who quote multiple uninvested capital while pounding their chest and give no regard to time value of money or opportunity cost.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I ran track and cross country in college, and I love trail running. And I think it's the contrast of being in this beautiful, serene nature and just really pushing yourself.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think just get our message out. I mean, this platform is really, really extraordinary. We get to serve this amazing foundation. And the competitive advantages this place has if you're a portfolio manager, they're enormous. And I think I appreciate them that much more having spent the 25 years back at O'Connor and UBS and understanding what other hedge funds and asset managers have to solve for. My biggest goal is just to get that message out and to make sure that we have kind of the best portfolio managers in the world working here.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's probably a couple years. I don't think it's as long as the five to seven year period. I think it's probably two to three years, I think is the right period of time. We made a strategic decision to take out beta in October of last year. And that looked like a really good decision going through December. And then basically between here and there, now I think the MSCI is up just over 3%, but it's been a pretty wild ride.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“And when you look at yourself and you're evaluating that differential performance or the policy portfolio, what kind of period of time do you think is fair to say, well, we deviated and we've added value or we were too early or whatever the case may be?”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's watching pressure points in markets. We have a head of macro here at SFM. He and I sit right next to each other. So there's conversations there. It's watching what your external managers are doing and seeing if there's anything in there that could be a tell. It's trying to connect all those dots and seeing if you think there's vulnerability either to the upside or to the downside. It's hard, though.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe there was not an answer to that question, but it's really hard to find those differentiated managers. And I think it's gotten harder over time. So we're at, as I mentioned, we have 17 or 16 internal strategies, 20 external. My guess is over time internal grows a little bit and external probably stays around here.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're trying to get to returns that are durably better than what you can get from a passive portfolio. And when I say we're overdiversified, one of the easy tells is that when you aggregated our external managers and you took out kind of beta, which isn't hard to kind of approximate, we were not getting an excess return. It was zero. And that's your paying a lot of fees and you're adding a lot of complexity and not getting compensated for it. So I think that's an easy tell. The interesting thing is I've been asked, like, what's the right number of managers? And if you can find really, really differentiated managers.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's just earning credibility. I was at UBS for 25 years. I had earned a lot of credibility. You have to kind of start all over and re-earn it to some degree when you come to a platform like this. That was probably the biggest challenge. And then putting a construct in place in terms of the overall portfolio construction was also a bigger task than I anticipated. And probably the third thing was cleaning up the portfolio. I didn't always make friends doing that.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“It occurs both at the beta level, relative to the policy portfolio public market beta is lower right now, you also see it flow through in the idiosyncratic leans. The interesting thing is that in the idiosyncratic bucket, I value the beta moves I get from macro portfolio managers. When you look at equity long short managers, when they move beta, and we've looked at this a lot of different ways, we don't think there's real value added. I actually consider that rolling that back up into where I am in the aggregate versus the macromanagers, I'll pay them to make those bets.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the policy portfolio is set by the investment committee that I report to, and we have quarterly board meetings. And then to your question, the investment team and I can deviate from that policy portfolio, and the investment committee actually encourages us to. But I think it's really important that we're measured both against that policy portfolio and then over the longer term against where that kind of 60, 40 neutral risk portfolio.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“From a tactical perspective, we have our long term where we think we're going to be over the cycle risk wise, and then we have our policy portfolio, which can deviate from that. Right now, we're lower risk than kind of where we expect to be long term because we think we're late cycle.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Something bad is going on in markets that is a huge advantage that we have given even with our external allocations, we get real-time price feeds on the vast majority of them. So it's pretty easy for us to know where we are and where, by the way, and the portfolios where we don't have perfect ticking prices, we estimate what that ticking P&L is and true backup to it. So we have a pretty good idea of where we are at any given moment in time.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“We have it relatively simple. So we have kind of our public market equity beta, private market equity beta, public credit, private credit, real estate, and then we have idiosyncratic, which is a little bit of, I admit it's a catch-all, but in that bucket, we try to be intellectually honest about really taking out the betas that we think will persist over time. It doesn't mean within that bucket there isn't beta from time to time, right? Because manager might have skill, macromanager will have skill in moving around that beta. So there will be beta in the idiosyncratic. But that at a very high level is kind of how we think about it, given kind of the sophistication of the platform. I can see real-time ticking P&L. And one of the really important games you play is you should be able to look at a Bloomberg and know pretty well what your P&L is. And if you're off by too much.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Eric kind of backstop as long as you guys remember we helped you out. Long story short is it ended up being the best investment grade deal in years. They got it done. They upsized it. We did very, very well on buying it. So it was win-win-win. We did something that I don't think any other investor in the market could have solved for in that time frame, in that size, and we did it by having three portfolio managers who are in really different disciplines working together. That's where I think we really are differentiated. And the strengths we're really trying to play to, there's other examples like that.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“He quickly turns to our investment grade credit trader who says, yeah, you know, it's a little dicey. It's potentially about to be downgraded and it could end up in kind of that no man's land. But there's a price for everything. And the banker said, but we need $300 million literally committed no later than Monday afternoon. So they come to me and say, hey, you know, can we do this at the right price? And we have 48 hours effectively to figure it out. So I turned to our third portfolio manager, private credit, and say, all right, if we own this for the next 10 years in our private credit portfolio, you're fine with it. Because if we buy the whole issue, it's a level three asset. It's never going to trade. But by the way, we have the ability to do that. There's not a lot of pools of capital that can solve for that. We agreed on a price with the company, agreed on a price with the banker, but then we said, you can feel free to shop.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Thought this was going to be easier than it turned out to be. Our public market equity portfolio manager owns the public stock. He gets a phone call and the banker is saying it's Friday. We need to solve for this and we're struggling mightily. Is there any chance you guys can help?”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I do think our ability to invest directly is really, really differentiated. And it's one of the things that we're spending a lot of time trying to leverage. And I can give you an example of that without naming the company's name, publicly traded company, $20 billion market cap, but it's regulated and it has a certain amount of CapEx that it has to spend each year. The company needed to raise $300 million. They were also in a situation where they were potentially going to be downgraded from investment grade to junk. So they were a little bit in no man's land. You're not getting a bad enough yield for junk bond investors to focus on it. Investment grade investors generally, if something's downgraded, they have to sell right away so they don't want to buy it today and have to sell it tomorrow. That's not good for their job security. This past summer, it's a Friday.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“As you look at other, I don't want to say traditional but say endowment or foundation type asset allocation structure portfolios, are there other things that you think you do or approach sort of meaningfully differently?”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Specifically in the private equity space, the people who I see doing the best job are the middle market type private equity firms who've really carved out a niche where they do add a lot of value to the companies they buy in their portfolio.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Private equity allocation that I inherited, and this goes back to our spend and what we're solving for being a little bit different than your typical foundation or endowment, we were overallocated to private equity generally with money in the ground and forward commitments. So we're in a situation right now where we're still making allocations, but we do want our portfolio to naturally roll down. So I don't want to build up a big internal capability. And again, I mentioned we have 90 external private equity allocations. Some of those firms are really spectacular at what they do. And one of the things that I constantly push myself and the team to be intellectually honest on is we should do internally what we're good at doing internally. And when there's people who are outstanding and have a niche, they deserve our capital and we should be allocating to it.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“In terms of internal private equity, we do it. So one of the things, and this goes about making us kind of a more unified team, we have sector specialists and we have regional specialists. And really one of the things that we've tried to do is better connect private and public markets because, again, it's something that generally it's hard for people to do, even the big sovereign wealth funds, they tend to be siloed between public and private markets. So one of the very purposeful things we've done strategy-wise is take down those walls between public and private. So when we see a private direct deal now, we'll tap 70 investment professionals internal at SFM. We'll tap the professionals who are best suited to evaluate that versus having a generalist private equity team, if that makes sense.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of their call option. So I think it's having those conversations and not shying away from them, I think, is pretty important.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think it's just in conversations, and I think you pick your moments in time when you're going to be bigger and you ask to address them. I have talked to some of our peers that, you know, we're not the only ones who are focused on these issues right now, private equity firms are able to dictate a lot of the terms because there is so much money chasing that opportunity set. But I think starting these conversations now is important and acknowledging that the issues exist. We just had a firm that asked for an extension. The results so far have been poor. It's like a 6% IRR. They're asking for an extension where they want us to pay a management fee while they extend the call option of their performance fee. And it's funny I was talking with our team and they're like, let's just consent. It's not worth it. And I'm like, wait a minute, let's have a conversation about why we will be happy to consent, but why they should not charge us a management fee since they're extending the duration.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“As a whole, your pool of capital is big enough, so you could make big commitments and try to exert some of those desires on a general partner. The flip side is, well, maybe you don't want to be big when those practices are out there. How do you kind of address that in practice in the market with the relationships you have?”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“And if you're a financial advisor and you're recommending private equity, first of all, it's the thing you can sell where you get paid the biggest fees usually. And nobody's going to know if you're right or wrong for 10 years. So I think you have to be really careful. There's things that the industry as a whole does that we've been slowly trying to push back on. So borrowing against LP commitments. Off the moment in time when they pick, but by the time everyone gets their stock stocks down ten or fifteen percent, it doesn't seem totally fair.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, private equity, first of all, I have seen and we have some truly exceptional managers. That said, in aggregate, if that industry feels really frothy to me and it feels like there's some bad practices that will come back to kind of haunt the industry, I also worry that it's maybe been oversold to retail. Because if you think about it, I think people take false comfort in kind of marks that don't necessarily move without actual asset value changes.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the duration of our book on average is pretty short. It's about 2.2 years sizing-wise, that book fifteen months ago was less than 2%. It's about 8% right now. And given the quality of the deals, we're able to source, I would expect that to double over the next 12 to 24 months. The hard thing with a short duration book like that and a lot of the deals amortize is that you have to kind of run to stand still.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Isn't sexy enough for those private credit funds, but for us it gives us a really attractive return. We can lever that return to get to a double digit because we have this incredible set of assets on our balance sheet. So we can borrow against our public equities at Fed funds plus 20 basis points, lever up this safe but esoteric private credit. And it works really well. And the other thing is when we're kind of underwriting that private credit, we don't want to be in a deal where there's 20 other people around the table because invariably in a moment in time when something goes wrong in a credit deal, if you're trying to solve for 20 utility curves, forget it. It's going to be lowest common denominator versus when we do deals, it's only us or us and one or two trusted partners so that if you get to that moment in time when you need to seize the collateral, it's not.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Majority is equities and credit, and we do have a macro book as well, but the majority is equities and credit. We also have been building in a fairly focused way internal private credit book and in private credit we've been very focused on going after obviously every day you see a story on the crowdedness of private credit, but a lot of the assets that this goes back to our competitive advantages, the assets that are being raised for private credit tend to be being raised in dedicated private credit funds. They usually have some kind of term lock and they need to produce something like high single digits, low teens returns to keep their investors happy and to justify both their fees and their lackup. What we've done is we've gone after lower yielding private credit that has hard asset coverage.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we kind of normalize, and it's been steady, and I think it's because we don't need to solve for the same things others are solving for. And one of the things that I think is really notable is the platform shops are becoming really, really dominant and they're solving for pretty similar things. And one of the things that was really kind of notable to me, we have an internal consumer staples portfolio manager. And that's been a tough place to make money for a while. So year to date coming into September, he was losing money, not a lot, but painful. And if he was at a platform shop, he doesn't make it till September. In September, and I don't think there's anyone else standing in that space. So it's an easy example of playing our own game.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in public markets, we're about 75% internal and 25% external. And when I came in, we were about 50, 50. And one thing I'll say, Ted, is our internal managers because we're trying to play to our advantages, which are, again, I think are pretty distinct relative to typical asset managers and hedge funds, they've persistently produced really, really attractive returns. And even when you look at kind of the hedge fund industry returns this year or traditional asset management returns, they were pretty good going into May. It's been lackluster might be kind since then internally our excess return and we kind of measure it on a, you take out beta and then you normalize for a five volatility. They're up about 6% year to date and it's been a pretty Pretty steady march.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Classes and across geographies, there's not a lot of places that can do that with internal investment expertise. So when we think about allocating internally, we want to make sure that manager is going to make the other team members alongside them better at what they do. And by the way, that also makes the bar for an external allocation That much higher because if we can do it well internally and get that mindshare, I'd rather do it internally.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, and I know this is one you hear all the time. Alignment is a really big deal. And like that, without alignment, you don't get out of the box. So I think it's first about alignment, then I think it's about process and them being able to articulate and us being able to believe that they really do have edge and something persistent in terms of how they can extract that edge over time. Internally, it's really important. One of the things that we've been trying to do is really connect the dots. So when we think about the competitive advantages of this platform and you think about kind of the asset management industry overall or the hedge fund industry, allocators tend to allocate capital in very, very tightly defined ways and tightly defined boxes. And being able to kind of connect across assets.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Again, we have this top down framework, but we also bottoms up, and we look externally and internally. And again, it goes to the amazing advantages I think this platform affords. So we allocate to 20 external hedge funds. We allocate to over 90 external and private equity funds. And internally, we have 28 portfolio managers and 17 kind of strategies or netting units, but we're thinking about building that portfolio. We're looking at those opportunities. We're thinking about when we look at a given external or internal strategy, we're thinking about what's the persistent beta of that strategy? What do we think the excess return looks like? And how does that excess return look relative to both the beta and our portfolio, but also the other excess returns that we have available to us?”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I'm really curious to ask how you get into there. So you're starting with a normalized or it's kind of a policy risk framework and you want to grab all these attractive pieces of risk. How does that happen?”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“We are relative to what we think that average risk level is over the longer term. So we don't expect always to be at the risk of a 60-40 portfolio. We'll expect to be above that at times and we'll expect to be below that at times based on the opportunity set.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Couple things on that. So the reason we define it as risk allocation instead of just saying 60-40 is because this platform is pretty incredible in terms of the investment horsepower we have in-house and the degrees of freedom we have with the $25 billion. We want to be measured against a passive 60-40 portfolio over that cycle. But the truth is we can grab a lot of other building blocks that play to our competitive advantage. So when we think about how we want to get risk, we want to really think about what are the different pieces of risk we can grab and what's the best at this moment in time. That's part of the thinking. And then the other thing we have is a shorter and medium term policy portfolio. And that speaks to what blocks or what risk are we grabbing at this moment in time and also where”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“You said it distilled into this risk structure that looks like 60-40, but it started with this view of what you see in the world three to seven years out. Talk a little bit more about what that view is and how that translates into a longer-term structure that kind of resembles 60-40 in risk.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“The oil embargo, yet Watergate, inflation hit twelve percent, SP went down forty-five percent and took a decade to recover. And so when he got to the Ford Foundation, he started to have them think in the context of the interrelationship between risk in the portfolio and spend. And he introduced concepts. And this, by the way, this is 40-some odd years ago. He introduced concepts like if you have forward foundation commitments, that is effectively leverage in your portfolio. So really, really interesting and obviously I think correct thinking, but those are things that I'm working with the investment committee I report to and the foundation to really think about how we want to flex risk in one aspect relative to risk in another aspect.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“In terms of equity risk, and there's a reason for that, when you think about your typical foundation, they tend to have fairly elastic expense. The Open Society Foundation has a less elastic found because it's a huge global organization. So the ability to maneuver spend very quickly, it's just harder. And in that context, you can't take as much risk. One of our board members is a big fan of yours, actually, someone named Ben Inker. And he introduced me to a gentleman named John Hagler. He's kind of an understated luminary in the industry, in my opinion. And can you think of a worse time to be CIO of anything?”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's not neutral to markets. This is neutral to what we expect to exist over kind of a five to seven year period. And for us, that equates to about a 60-40 portfolio. So definitely not market neutral. That's fairly high octane, although it's less than your typical foundation or endowment.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the interesting thing is the portfolio when I arrived was actually over diversified, I'd argue. So there weren't enough big bets in the portfolio. And one of the first things we said about doing is putting in place kind of a top-down architecture that would inform our bottoms up asset allocation. And in doing that, we really reduced the number of allocations we made to managers to try to increase the concentration and give ourselves the ability to make more big bets. And in terms of that top-down architecture, we have two important kind of constructs. One is for the long term and one is for the more short and medium term. The long term is we've set kind of a neutral risk level.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“Somewhat concurrent with me coming over here, George transferred the bulk of his wealth to the Open Society Foundations. So before I came here, these assets, it wasn't managed the way you would think in a traditional foundation because it was a family office and they didn't.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think a couple things. First of all, communication. I talked about the fact that I'd worked at O'Connor with people for such a long period of time when I took over running investments at UVS. I had to earn credibility with people who I didn't know as well and they didn't know me as well. And to do that, you really have to spend time. You have to communicate. So those skills actually were transferable when I came here. And I think that was really interesting. I also, it was good to understand the utility curve of the client who allocates traditional asset classes. I had a big passive business under me in that role given the increasing dominance of passive players in markets. I think that was really, really helpful.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“You spend your time doing non investment tasks and not an insignificant amount of time. And it was one of the reasons coming to Soros was so appealing because it really kind of got me back to what I'm passionate about.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's an interesting topic, and it's something that we talk about a lot here. I think in the asset management world, the difference between quote unquote traditional asset managers and hedge funds, those worlds are blurring, and it's really all about what's the value you can deliver above and beyond what I can do for myself. And in that context, I think what we wanted to do with our products we offered clients at UBS was exactly what we had been doing at O'Connor. And it was about delivering valuable set of returns in the context of kind of opportunity set and risk. So it felt like a really natural progression. And I also think from my perspective, it was a moment in time when the asset management industry overall was going through a lot of transition. And that usually creates a lot of opportunity.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source
“We did, and to be candid, we attempted a management buyout at that moment in time. And we got close, but we were recovering to quickly as were financial markets. So the trader and me and my peers actually tried to extract ourselves at a good price, but ultimately they decided they wanted to hold on to us.”
2019-11-04 · Capital Allocators · Dawn Fitzpatrick – Multi-Faceted Investing at Soros Fund Management (Capital Allocators, EP.112) · IDENTIFIED FROM THE TRANSCRIPT · source