Art of Boring

GLP-1 drugs and the peptide supply chain behind them have grown like no other drug class, reaching 44 million users within five years. Equity analyst Joshua Samuel looks past innovators Eli Lilly and Novo Nordisk to the contract manufacturers and consumables underneath them. He explains why oral GLP-1 pills can need up to 10 times more drug substance than an injection, walks through building a 39-amino-acid peptide like a LEGO set, and lays out why a silica gel supplier with about 70% global market share does not screen as a healthcare company. The conversation lands on a simple idea: growth in this market rests on several independent drivers rather than one. 0:00 - Introduction: GLP-1s Beyond the AI Trade 1:17 - Consumer Biotech: 44 Million GLP-1 Users in Five Years 2:49 - Small Molecules, Biologics, and Peptides Explained 5:01 - GLP-1 Generics, Oral Pills, and Patent Expiry 6:48 - Why Oral GLP-1 Pills Need More API 8:28 - How Peptides Are Made: The LEGO Analogy 10:56 - The Purification Bottleneck and Silica Gel 12:29 - Why Drug Approvals Lock In Suppliers 13:37 - Peptides vs. Semiconductors: Growth Drivers and Multi-Agonists [TBC] - Valuations: CDMOs vs. Consumables 19:30 - Other Healthcare Trends: Biosimilars and Small Molecule Complexity 21:53 - Outro & Subscribe GLP-1s have ramped to 44 million users within five years of Ozempic's launch, outpacing blockbuster small-molecule and biologic drugs and becoming what some now call consumer biotech.

Peptide demand has moved from kilograms to tonnes. Five to seven years ago, a 100 kg API order could put a buyer in a contract manufacturer's top 10 for the year.

Patent expiries and oral pills both add volume. Sandoz estimates generics could expand the market 2-7x over 5-10 years, and oral pills need 2-4x more API at Novo Nordisk and 8-10x elsewhere.

Purification is the step no manufacturer can skip. Across 39 assembly steps, small yield losses compound, and once a drug is past phase two, its silica gel supplier is effectively locked in.

The team owns a silica gel supplier with about 70% global share whose healthcare business is roughly 15% of sales but almost 40% of profits, and which trades like a specialty chemicals company.

Beyond peptides, easier biosimilar approval is shifting work toward analytical software, and close to 70% of small molecules in development now need four to seven synthesis steps rather than two or three.

Germany's 10-year government bond, negative 0.5% during the pandemic, now yields 3.46%, while the UK's has climbed to 5.5% and Japan's to about 3%. International equity portfolio manager David Ragan examines what the rise in global rates means for how the team values companies. He explains why higher discount rates change the math on future cash flows, how a bank in Ireland became attractively priced once its post-crisis turnaround was overlooked, and why the team treats China's low risk-free rate as artificially depressed. Above all, he returns to a simple idea: the value of diversification.

Key Takeaways

Global bond yields have risen broadly this year: Germany's 10-year, negative 0.5% during COVID, is now 3.46%, the UK's is 5.5%, and Japan's has climbed from 0% to about 3%.

China is the exception. Tight capital controls, a weak real estate market, and cautious bank lending have kept its market rates falling even as the rest of the world's have risen.

Higher government rates mean higher discount rates and lower equity values unless growth offsets them; a 9% IRR that looked attractive five years ago no longer automatically clears the bar.

The team initiated a position in an Irish bank with a deposit beta of about 0.2%, meaning funding costs barely move when interest rates rise, which widens the spread it earns on loans.

In China, the team treats the low risk-free rate as artificially depressed and adds a larger equity risk premium on top, even on a top holding, Tencent, with an IRR still above 10%.

The team keeps the portfolio deliberately diversified, from capital-cycle businesses such as BHP Billiton to names tied to AI demand, so no single environment decides the outcome.

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: David Ragan, CFA, Mawer Portfolio Manager, International Equity

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.

Visit us at:

https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

#ArtOfBoring #MawerInvestmentManagement #MawerInvestment #Podcasts

Q3 2026 market update: Canadian investment-grade bonds returned roughly negative 3% while stock markets in many parts of the world ended September near record highs. Institutional portfolio manager Kevin Minas and investment counsellor Stu Morrow review the quarter, from oil above $100 a barrel and a more hawkish Fed to bond yields at multi-year highs. They discuss why hyperscalers borrowing over US$200 billion this year is crowding out other issuers, what a narrow AI-led rally means when more than half of the S&P 500 sits 20% below its peak, and whether the 60-40 portfolio still needs 40% in traditional bonds. The conversation closes on the quarter's asset allocation changes in the balanced strategy. Key Takeaways

• Bonds had a difficult quarter. The FTSE Canada Universe printed a negative 3% return as yields climbed to multi-year highs on inflation, fiscal deficits, and growing debt burdens, with flashbacks of 2022 for bond investors.
• Oil mostly above $100 a barrel kept inflation in the conversation. A more hawkish message from the Fed at Jackson Hole shifted the debate from when rates get cut to whether more hikes are needed, and the ECB raised rates while the Bank of Canada held.
• Hyperscaler borrowing is crowding out other issuers. Microsoft, Amazon, Meta, and peers have issued over US$200 billion of debt year to date in 2026, and because AI is treated as an existential race, those borrowers are less sensitive to their cost of capital.
• The equity rally is real but narrow. AI infrastructure and the hyperscalers account for roughly two-thirds of expected 2026 earnings growth, yet more than half of S&P 500 stocks ended September about 20% below their all-time highs.
• For a 60-40 investor, 40% in traditional bonds may no longer be the right number. Pairing core fixed income with an unconstrained global credit strategy means taking duration risk only where the team is being paid to, and the team added triple-B corporate issues at 7% to 8% yields.

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.

Visit us at:

https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

#ArtOfBoring #MawerInvestmentManagement #MawerInvestment #Podcasts

Canada-U.S. tariffs are back, and Canadian investors are asking what they mean for their portfolios. Canadian equity portfolio manager Vijay Viswanathan and fixed income portfolio manager Crista Caughlin break down the tariff picture and last month's Canada Investment Summit across stocks and bonds. They cover why the equity portfolio carries little trade-exposed revenue once exempt commodities like oil and potash are set aside, why unemployment matters more than tariffs for Canadian banks, and how a new business-investment tax deduction pulls the effective rate below the U.S. The conversation closes on a simple idea: what the summit needs now is shovels in the ground, not sound bites on TV.

Key Takeaways

The macro backdrop has reversed since 2025: inflation is grinding higher on oil, and the Bank of Canada may hike rather than cut.

The 50% tariff headline overstated reality; USMCA held up and exempt commodities kept trade-exposed revenue low.

About 45% of the Canadian equity portfolio's revenue is CAD and roughly 30% USD, but little is in goods tariffs can easily target.

For banks, unemployment is the KPI that matters; loan losses follow job losses, and diversified business mixes add resilience.

A new tax deduction pulls the effective rate on new investment toward 6% versus roughly 16% in the U.S., but market access still constrains exporters.

The summit's trillion-dollar ambition means a decade of debt issuance, with crowding-out risk against hyperscaler and AI borrowing.

Host: Andrew Johnson, Institutional Portfolio Manager

Guest: Crista Caughlin, Fixed Income Portfolio Manager

Guest: Vijay Viswanathan, Director of Research, Canadian Equity Portfolio Manager

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.

Visit us at:

https://www.youtube.com/@MawerInvestment

https://www.mawer.com

https://www.linkedin.com/company/mawer-investment-management/

https://www.instagram.com/mawerinvestmentmanagement/

Global credit is absorbing record corporate bond supply as the AI data centre build-out floods the market with debt, yet spreads remain at multi-decade tights. Global credit analysts Sandro Morassutti and Marty Lee revisit the risks the team flagged a year ago, AI-linked issuance, Fed credibility and independence, fiscal spending, and geopolitical risk, and explain why credit spreads have held while government yields have driven the move. They walk through term premium and the long end, why they favour short-dated high-quality credit, the modest duration they have added, and how they are positioned to act when a dislocation finally arrives.

Key Takeaways

AI data centre debt has driven U.S. corporate bond supply to about $1.7 trillion, up 27% year over year and on track for a record.

Despite record issuance, investment-grade spreads sit near 80 basis points and high yield is tighter year to date, at multi-decade tights.

Most of the move in yields has come from government bonds: sovereign yields hit multi-decade highs in the U.K., Japan, and beyond.

The Fed hiked and kept its independence, but credibility and term premium concerns helped push the U.S. 10-year through 5%.

Credit is not directly pricing geopolitical risk; ECB research shows spreads repricing far less than history would imply.

The team favours short-dated, high-quality credit, added modest duration (about 1.2 to just over 2 years), and lifted high yield from roughly 8-9% to 15-16%.

The goal is not to predict the dislocation but to hold the quality and liquidity to buy one.

Companies Mentioned: Amazon, Alphabet, Meta, Oracle

Host: Kevin Minas, CFA, CAIA, Mawer Institutional Portfolio Manager

Guest: Sandro Morassutti, Mawer Credit Analyst; Marty Lee, Mawer Credit Analyst

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.

Visit us at:

https://www.youtube.com/@MawerInvestment

https://www.mawer.com

https://www.linkedin.com/company/mawer-investment-management/

https://www.instagram.com/mawerinvestmentmanagement/

Is AI compute demand durable? Emerging markets equity portfolio manager Wen Quan Cheong returns from a research trip across Taiwan and South Korea and examines AI chip demand, the semiconductor supply chain, and the companies with the strongest structural tailwinds. He breaks compute demand into training, alignment, and inference, explains why margins can widen further down the AI supply chain, and shares what TSMC, SK Hynix, and Samsung revealed about whether this capital cycle is different from the dot-com boom. He also explains how the team trimmed into a crowded AI trade, and makes the case for a non-AI idea: a port operator in the Philippines.

Key Takeaways

Slowing the pace of AI is partly a safety and alignment story, and alignment work is itself compute-hungry, which could offset a slower training cycle.

Compute demand splits into training, alignment, and inference; inference is skyrocketing with agentic AI, and one lab's training-to-inference mix has gone from ~80-85% training to about 50/50.

AI looks under-penetrated on tokens per user and per agent, the real driver of compute demand, even as user penetration is already high.

Research trips are a deliberate edge; early groundwork let the team act quickly on clean-room contractor Acter.

Margins can widen further down the AI supply chain thanks to consolidation and price-inelastic hyperscaler demand.

TSMC and memory makers point to a stronger foundation than dot-com and multi-year agreements that lengthen the cycle, though overbuilding is still a risk.

A non-AI idea: a Philippine port operator with defensive, price-setter characteristics and a potential Brazil concession as optionality.

0:00 - Introduction: AI Concerns and Emerging Markets 1:30 - AI Safety, Pacing, and What It Means for Chip Demand 5:03 - Three Buckets of Compute: Training, Alignment, Inference 8:23 - Is AI Demand Under-Penetrated? Users vs. Tokens 9:51 - Why Research Trips Are an Investing Edge 15:20 - Acter: The Clean-Room Bottleneck Behind the Chips 16:58 - Why Margins Grow Further Down the AI Supply Chain 18:50 - TSMC and Memory Makers: Is This Cycle Different? 22:54 - Reading the Market Signal in a Crowded AI Trade 25:48 - A Non-AI Idea: A Port Operator in the Philippines 28:12 - Outro & Subscribe

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Wen Quan Cheong, CFA, Mawer Emerging Markets Equity Portfolio Manager

Visit us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

Global equity portfolio manager, Paul Moroz, speaks to a wide range of market topics, including what higher discount rates mean for equity valuations and the subtle shifts you might not see in the headlines but that absolutely matter.

Stay tuned for the second half, where Paul discusses Millennium Prize math problems, humility, podcast proliferation, and entropy—for those seeking useful mental models for portfolio construction, the payoff is worthwhile.

Key Highlights:

Bond yields set the discount rate for every asset, and the 10-year U.S. Treasury is above 5%.

A 1% rise in the discount rate implies roughly a 15% decline in equities, yet markets are near highs.

NVIDIA at 13 times next year's earnings suggests multiples compressed while earnings carried prices.

Positioning has moved toward rate beneficiaries and away from consumer discretionary.

A portfolio should work like a rope, with many independent strands so no single one carries the load.

Most of what an investor sees is noise; the work is putting energy into the part that matters.

0:00 - Introduction: Rising Bond Yields and Record Highs 1:11 - Why Equity Markets Keep Climbing the Wall of Worry 3:30 - Are Corporate Earnings Just AI? 4:45 - Bond Yields, Discount Rates and the 10-Year Treasury 7:55 - The Equity Duration Math: 1% in Rates, 15% in Stocks 9:32 - NVIDIA at 13 Times Earnings: Growing Into Valuations 11:19 - How Higher Rates Changed the Portfolio 13:38 - Building a Portfolio Like a Rope 16:06 - Humility as an Investment Process 18:45 - ChatGPT Solves a Millennium Prize Problem 23:00 - Entropy Explained: Perfume, Lawns, and Chaos 24:49 - Podcast Proliferation and the Nash Equilibrium 27:40 - Knowledge Adds, Wisdom Subtracts 29:10 - Outro and Subscribe

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Paul Moroz, CFA, Mawer Portfolio Manager

This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

Private equity is opening up to individual investors, and the line between public and private markets is blurring. In this episode, private investments portfolio manager Peter Lieu and institutional portfolio manager Kevin Minas break down secondaries and continuation vehicles, the difference between IRR and distributions, and how Mawer built institutional-quality private equity access through fund commitments, co-investments, and vintage-year diversification, including a new mutual fund trust for registered accounts like RRSPs and TFSAs. 0:00 - Introduction: Private Equity Beyond Endowments and Pensions 1:30 - A Brief History of Private Equity Allocations: Yale to the Maple 8 2:58 - Public-Private Convergence: Why Companies Stay Private Longer 6:17 - Secondaries and Continuation Vehicles Explained 9:40 - IRR vs. Distributions: The Delayed-Exit Debate 13:45 - Bringing Private Equity to Retail: Institutional-Quality Access 15:14 - Co-Investments and 50 Years of Business-Model Analysis 18:25 - Why a Mutual Fund Trust for RRSPs and TFSAs 20:22 - Liquidity and Redemption Windows in a Semi-Liquid Structure 22:21 - Private Equity Returns in a Higher-Rate World 26:06 - What's Next: Sports, Live Entertainment, and Democratization 32:13 - Outro & Subscribe

-The line between public and private markets is blurring. Companies are staying private longer, more financing is available without an IPO, and public companies are increasingly being taken private, so accessing value early in a company's life increasingly depends on having private equity exposure.

-Continuation vehicles are the modern version of the secondary buyout, not a new idea. They let a manager hold a strong business for longer, and roughly 90% of LPs who can roll into the new vehicle choose to take liquidity instead, which creates both a conundrum for investors and an opportunity for disciplined buyers.

-Distributions matter as much as IRR. IRR assumes capital is reinvested at the same rate and can look healthy even when little cash has been returned, so the team evaluates managers on money multiples and cash back, not IRR alone.

-Mawer built its access the way large institutions do. The program pairs fund commitments for diversification across companies, geographies, sectors, and vintage years with no-fee, no-carry co-investments, where the firm applies 50 years of business-model analysis to a single company decision.

-Registered accounts and private equity are naturally aligned. A new mutual fund trust extends the strategy to RRSPs, LIRAs, and TFSAs, where long time horizons and capital that is already locked up match the illiquidity of the asset class.

-Recent returns have been weaker as higher rates pressured valuations and exits slowed while public markets outperformed, but the long-term value drivers remain in place, and a staggered deployment that began in 2022 positioned the strategy for a constructive backdrop.

Companies and Assets Mentioned: SpaceX, Amazon, Alpine F1 team, University of Utah Athletics, RedBird Capital, Otro.

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Kevin Minas, CFA, MBA, CAIA, Mawer Institutional Portfolio Manager

Guest: Peter Lieu, CFA, Mawer Portfolio Manager, Private Investments

This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

AI CapEx is on track to reach roughly $700 billion at the four largest hyperscalers this year, and equity analyst Irena Petkovic breaks down where all that money is going and what has to be true for it to earn a return. She explains how data centers turned from cost centers into revenue-producing AI factories, the four ways hyperscalers monetize compute, and how the token economy actually works. She then weighs the early evidence of returns against the risks around token pricing, debt financing, and public backlash, and describes how the team positions the portfolio around it.

0:00 - Introduction: The $700 Billion AI CapEx Question 1:29 - How Big Is the Spend? Apollo, Telecom, and Railroads 4:11 - Data Centers as AI Factories: From Cost Center to Revenue 5:53 - Four Ways Hyperscalers Monetize Compute 7:10 - The Token Economy Explained 11:26 - Early Evidence of Returns on AI Investment 14:39 - The Bear Case: Token Prices, Debt, and Backlash 18:49 - Positioning the Portfolio Around AI 20:35 - Outro & Subscribe

Highlights:

• Hyperscaler AI CapEx of about $700 billion this year is a scale rivaled historically only by the railroads.
• Capital intensity at Microsoft, Meta, Google, and Amazon has jumped from 5-10% of revenue to upwards of 45%.
• A high return on invested capital justifies spending down free cash flow rather than protecting it.
• The data center is now a revenue-producing AI factory that turns electricity and chips into sellable tokens.
• Compute is monetized four ways: GPU rental, productivity products, enhancing own businesses, and selling tokens.
• Early returns look encouraging, with sub-three-year hardware payback cited and demand exceeding supply.
• Risks to watch are token prices falling faster than volumes and a shift toward debt-funded build outs.

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Irena Petkovic, CFA, Mawer Equity Analyst

This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

How do you value a memory semiconductor stock like SK Hynix when no one can predict DRAM prices? Equity analyst Shan Rui Yeo walks through the team's Monte Carlo valuation framework: a discounted cash flow run through thousands of scenarios that prices the business on a distribution of returns rather than a single forecast. He also explains how two-times leveraged single-stock ETFs have been amplifying SK Hynix's daily price swings, why regulators and Korean brokers are responding to retail leverage, and why flow-driven volatility can be a gift for long-term investors. The through-line: memory can be cyclical, structurally growing, and wealth-creating all at once. 0:00 - Introduction & Disclaimer 0:21 - How Do You Value a Memory Stock Amid Huge Uncertainty? 0:54 - Monte Carlo Valuation: Pricing SK Hynix on a Distribution of Outcomes 5:27 - Day-to-Day Volatility: Fundamentals or Flows? 6:17 - How 2x Leveraged Single-Stock ETFs Amplify SK Hynix Price Swings 9:40 - What Investors Underappreciate About the Memory Industry 10:21 - Closing Thoughts & Subscribe

Key Takeaways

• Key uncertain variables (DRAM prices, supply response, China risk) are modelled as ranges and run through thousands of scenarios; the output is a distribution of returns, treated stochastically.
• SK Hynix scenarios: bull (prices hold through the decade), realistic (decline from 2028 as supply arrives), bear (accelerated decline on over-investment and Chinese supply).
• The test is being paid adequately across the whole distribution, not picking the right scenario; the distribution centred around 12% with positive skew.
• New data points (LTAs signed, capacity expansion) update the distributions; position sizing follows the shape, and the team trimmed as the shares ran.
• Two-times leveraged ETFs rebalance by buying after rises and selling after falls, amplifying 10 to 15% daily moves in SK Hynix.
• Flow-driven volatility widens the gap between price and value, which long-term investors can use.
• Memory can be cyclical, structurally growing, and wealth-creating at the same time.

Host: Rob Campbell, CFA, Institutional Portfolio Manager Guest: Shan Rui Yeo, CFA, Equity Analyst This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/ #ArtOfBoring #MawerInvestmentManagement #MawerInvestment #Podcast #Finance #Investing #semiconductor #tech #techexplained #memory #skhynix