Episode Details

The AI boom is being financed with debt—and the numbers are staggering.

The world's biggest tech companies are spending hundreds of billions of dollars to build the infrastructure behind artificial intelligence. But while investors focus on the stocks, Brian Carney, Portfolio Manager at Mawer Investment Management, is watching the credit markets—and he sees risks most investors are ignoring. 

On this episode, Brian, who manages the Mawer Global Credit Opportunities Fund explains why Alphabet, Amazon, Meta, Oracle and others are becoming some of the largest borrowers in the world, why credit markets may be underpricing risk, and why he believes we're getting closer to a "reckoning" after years of easy money and aggressive lending. He also shares why he's skeptical of parts of the private credit market, what surprised him about SpaceX's investment-grade rating, and why the next big opportunity could emerge when investors least expect it.

Brian also makes the case that investors are too complacent about America's fiscal situation. With deficits running at historically elevated levels and government debt continuing to climb, he argues the bigger risk may not be a U.S. default—but a shift in investor sentiment that forces borrowing costs higher. What happens if investors start demanding more compensation to finance Washington's spending? And what could that mean for stocks, bonds, and the broader economy?

In Pro Picks Brian shares three high-conviction bond ideas, including AI infrastructure player CoreWeave, fertilizer producer FMC Corp, and energy company Continental Resources. He breaks down where he's finding attractive yields, how he's assessing downside risk, and why he's keeping dry powder ready for a potential market dislocation.

Whether you're an equity investor, bond investor, or simply trying to understand how AI is reshaping global capital markets, this conversation offers a perspective you won't hear often.

Timestamps
00:00 Trailer
02:15 Intro 

04:30 Mawer’s credit opportunities fund 

06:45 We’re on the verge of a reckoning in the credit markets
10:25 What the spreads are telling us
12:25 The debt-fuelled AI funding boom
16:45 Will the spending pay off? 

18:35 The question about who wins less important for credit investors
20:15 Where does the money come from to meet the unprecedented demand?
22:15 Does SpaceX’s investment grade rating make sense? 

26:25 Hamilton Enhanced Mixed Asset Allocation ETF-MIX
28:25 Any signs of strain in the CDS market? And why Carney’s portfolio is low on tech
31:55 The inflation question
35:25 How Carney is mitigating risk in the portfolio 

37:25 The debt & deficit situation in the U.S. is out of control
43:10 Brian’s Pro Picks

Sponsors

For over 25 years, Raymond James has been helping Canadians achieve their financial goals. Visit https://raymondjames.ca today to discover how you can live a life well planned.

Pro Picks is brought to you by ATB Financial.  Visit https://ATB.com/inthemoney for more information

The mailbag is sponsored by Hamilton ETFs. For more information on the Hamilton Enhanced Mixed Asset Allocation ETF visit:  https://hamiltonetfs.com/etf/mix/ 

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DISCLAIMERS 

The content provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice.The views expressed by the host and guests a