Show Notes
In this episode, Brian Carney, lead portfolio manager of the Mawer Global Credit Opportunities Strategy, examines a fixed income backdrop reshaped by geopolitical escalation, an energy shock, and sharply changing interest-rate expectations. He explains why higher benchmark yields and modestly wider spreads still leave many parts of credit looking expensive, where Mawer is finding more selective value through bottom-up research, and why the strategy remains tilted toward shorter-duration, higher-quality credit. The conversation also explores AI-related bond issuance from hyperscalers, signs of strain in leveraged finance and private credit, and what a more fragile lending environment could mean for investors.
Highlights: How geopolitical escalation and higher oil prices have pushed inflation concerns back to the forefront and reshaped rate expectations in major markets. Why higher benchmark yields have not been enough to make much of longer-duration or lower-quality credit compelling today. A look at two selective opportunities: CoreWeave, tied to AI infrastructure, and a fallen angel with potential catalysts and downside protection. How AI is being used inside Mawer's research process to sort through a vast global credit universe and surface new ideas. Why massive borrowing by hyperscalers to fund AI CapEx could pressure investment-grade spreads over the next 12 to 18 months. Early signs of stress in leveraged loans and private credit, and why Brian sees growing evidence of "decay" in parts of the lending market. Chapters: [0:00] Introduction [0:32] Disclaimer [0:49] Welcome and Guest Introduction [0:54] Macro Environment Shifts: Geopolitical Tensions and Energy Shocks [1:44] Impact on Global Credit Markets and Central Bank Expectations [4:32] Where to Find Value in Credit Markets Today [6:47] Portfolio Positioning: Defensive Stance Explained [7:18] Credit Opportunity #1: CoreWeave and the AI Revolution [8:35] Credit Opportunity #2: A Fallen Angel Opportunity [9:49] Using AI Technology in Credit Research [10:59] Hyperscaler Bond Issuance: The New Market Dynamic [13:47] Impact of Tech Giants Crowding the Investment Grade Market [14:56] Private Credit Risks and Bank Syndication Challenges [16:53] Signs of Decay in Private Credit Markets [20:42] Closing Thoughts: Positioning for Opportunity [21:16] Outro
Host: Kevin Minas, CFA Institutional Portfolio Manager
Guest: Brian Carney, CFA 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 Mawer at https://www.mawer.com. Follow us on social: LinkedIn - https://www.linkedin.com/company/mawer-investment-management/ Instagram - https://www.instagram.com/mawerinvestmentmanagement/
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