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/