Dawn Fitzpatrick, Chief Investment Officer at Soros Fund Management, warned investors to brace for a “painful” 18 to 24 months as markets face mounting uncertainty from geopolitical tensions and AI disruption. Speaking at the Bloomberg Invest conference in New York, Fitzpatrick highlighted falling software stocks and Middle East conflict as key pressure points.

Fitzpatrick also addressed growing concerns about private credit funds, noting that business development companies have been hit by redemptions amid rising loan defaults to software firms. Major asset managers including Blackstone Inc., Ares Management Corp., and Blue Owl Capital Inc. have faced client withdrawal requests from their large private credit funds aimed at individual investors.

The CIO expects elevated redemptions to continue, with some fund structures coming under pressure. However, she praised Blackstone for meeting a request to redeem 7.9% of investments, saying the short-term fee impact will be outweighed by long-term business benefits. Fitzpatrick noted her firm has been selectively buying shares in business development companies where underlying loan portfolios appear attractive.