Soros CEO 2026 outlook: Oil, AI and mega IPOs

KEY TAKEAWAYS

• Despite elevated oil prices due to the war in Iran, the Fed could have room to cut interest rates in 2026 but policy is complicated by uneven consumer strength. 
• As AI disrupts the software sector, private credit fund redemption requests were beginning to pick up.
• 2026 could be a year of mega IPOs, including OpenAI, SpaceX, and Anthropic, that shuffle the names in index funds. 

Geopolitical shocks and AI disruption are roiling public and private markets, putting investor confidence to the test. Against this backdrop, investors are recalibrating how they assess risk and opportunity across asset classes.

Speaking at Bloomberg Invest in early March, Soros Fund Management CEO & Chief Investment Officer Dawn Fitzpatrick discussed current sources of volatility in public and private markets at Bloomberg Invest and shared insights on the implications for institutional investors’ portfolios.

Oil shocks vs. steady growth: The Fed’s 2026 balancing act 

Fitzpatrick outlined U.S. strikes on Iran in February further heightened uncertainty already fueled by geopolitical tensions and disruption from AI.  Although the conflict is weighing on oil prices and capital conditions are tightening, Fitzpatrick says the U.S. and global economies are likely to outperform expectations. 

Fitzpatrick points out that oil prices only impact about 5% of consumer spending, and the Fed tends to look through temporary increases in oil prices when deciding whether to raise or lower interest rates. She noted that “while lower-end consumers are struggling, consumers overall are doing okay,” which creates a challenging dynamic for policymakers. 

“The Fed has room to lower rates, and in the context of everything going on, it would be smart of them to do. I think inflation is going to continue to trend lower, and while AI isn’t having any effect on inflation now, it ultimately will.”  

Fitzpatrick said she expected the Fed could cut rates twice in 2026, provided the increase in oil prices does not last longer than three months. She also suggested the Fed should look through some of the AI boom, as rate adjustments of 50 bps in either direction are unlikely to impact the amount of AI-related capital expenditures taking place.

AI’s divide: Big tech advances as credit markets feel strain 

Software shares have taken a hit as AI disrupts the industry, but Fitzpatrick still sees pockets of opportunity. Even in the public sector, she says, some software names will be winners.  

At the same time, large companies using their operating leverage to spend large amounts of capital on tech are creating a moat relative to competitors, and those advantages will become very apparent over the next 12 to 24 months: “AI is going to play to people who are bigger and can make big investments structurally.” 

In the private credit markets, the pickup in redemption requests across several private credit funds is being driven in part by investors’ concerns about their exposure to software businesses susceptible to AI disruption. “Not all funds are created equal, and some funds have disproportionate exposure to the software sector,” said Fitzpatrick. Within software, this is a structural re-rating that is deserved, she noted. 

Following headlines about Blackstone Inc. allowing redemptions of 7.9% of shares from its flagship private credit fund, Fitzpatrick predicted that redemptions will continue as those concerns work their way through the system. And while alternative asset managers may feel some short-term pain, returning capital to investors as promised will benefit those managers in the long run.  

She also observed that publicly traded BDCs are trading at a roughly 23% discount, and private BDCs and interval funds have to return capital at NAV, which will result in investors redeeming those private BDCs and interval funds and transitioning to public BDCs.  

“You’ll get a higher yield even if the NAV discount doesn’t close.” Ultimately, this will create pressure for secondary sales in private credit.  

“We’re dipping our toe into buying public BDCs where we like the underlying loan portfolios. We like to provide liquidity when liquidity premiums are blowing out, and I would argue this is going to be one of those moments in time,” said Fitzpatrick. 

“Same thing on secondary sales: there’s going to be great opportunities there, and we like to be a buyer. We are in a good liquidity position and looking forward to a little bit of carnage in private markets.”

How a blockbuster IPO year could reshape markets 

Fitzpatrick indicated that after leaning incrementally out of private equity in 2021 and 2022, Soros may be changing that mix in 2026. “There was a lot of hope coming into 2026 that it would be the year when PE will start to cash flow in a meaningful way,” she said. “The IPO market is open, but only for really high-quality companies.” 

2026 may be a year of mega IPOs, with rumors of OpenAI, SpaceX, and Anthropic looking to go public—any one of which would be the largest IPO ever, said Fitzpatrick.  

“In aggregate, if you get 10% float, that amounts to more than a quarter trillion dollars in IPO proceeds, which is more than the U.S. had in aggregate since 2022,” she said. “It will clean up those cap structures and give them access to capital markets in terms of heavy spend.”  

She also noted that there will be hard-fought efforts by these companies to get included in the indexes, which will create natural buyers, but means investors will have to sell the other names currently in the index.  

“If you look at historical data, when you get a really big pop in IPOs, generally, six months forward, the market re-rates on a multiple basis lower.”