Between investor discourse and investor

Some conversations are better held on the water than in a conference room. On one of those rare cloudless days in Hamburg when the Elbe was calm, Private Banking Magazine became Private Barkassen Magazine for a few hours. Together with family office representatives, private bankers and portfolio managers, including Robert Hiscock and Simon Tremblay from Montrusco Bolton and Stefan Welk from Universal Investment, we set sail on the ‘St. Pauli’.

The sun, gentle breeze and unobstructed view of Hamburg created the perfect setting for conversations about stock valuations, compounding, technological dominance and the meaning of active investing. Between investor discourse and investor romanticism, it quickly became clear that when Canadians talk about quality, discipline and distance, it sounds not only like a good investment, but also like Nordic serenity.

Canadian distance, technological precision and a clear focus on quality. Montrusco Bolton invests in a select group of highly compelling technology companies. In this interview, portfolio manager Robert Hiscock explains how to distinguish between 'expensive but justified' and 'expensive without foundation' — and why active investors should seize the moment.

You often talk about 'quality growth'. Could you explain what you mean by that, especially in the context of technology companies?

Robert Hiscock: For us, it means sustainable, steadily growing cash flows based on solid economic structures. We look for high gross margins, scalability, a strong return on invested capital, disciplined capital allocation, and recurring revenues. Equally important are low customer dependency and a resilient balance sheet. Ultimately, we are looking for companies that can finance their own growth, even in difficult times.

Many of the major US technology companies – the renowned 'Magnificent Seven' – are currently trading at extremely high multiples. For some investors, this seems like a warning sign.

Hiscock: The key is to be able to distinguish between "expensive but justified" and "expensive without fundamentals".' We always compare valuations with historical data, peer companies and earnings growth profiles. Of course, there are stocks that seem overpriced. However, others, such as Nvidia and Microsoft, remain attractive despite their price rallies because their growth prospects are exceptional. We are a long way from the extremes of the dot-com bubble.

You often emphasise the importance of catalysts in stock selection.

Hiscock: That's right. The market tends to extrapolate from the past. We look for turning points that have not yet been factored into prices – these can be changes in margins, pricing power, or the launch of a product. Our analyses of business models and value chains are precisely aimed at identifying such moments at an early stage.

At the same time, technological development is often non-linear, occurring in disruptive leaps.

Hiscock: That's why we model scenarios that take regulatory, competitive and technological risks into account. We ask ourselves: How quickly could a moat erode? What role do open-source solutions play, and what regulatory differences exist between regions?' The higher the risk, the lower the weighting in our portfolio.

The Magnificent Seven play an important role in your portfolio.

Hiscock: Yes, we currently hold five of the seven, albeit with different weightings. We are convinced of their dominance, but diversification remains crucial. Our job is to balance conviction with risk management.

To achieve this, you aim for a neutral style with a beta of around one.

Hiscock: Exactly. Despite holding a high proportion of actively managed shares, we maintain a balanced portfolio in terms of sectors and regions. In weak markets, we increase our beta and in strong markets, we reduce it. This keeps the deviation from the benchmark low without compromising our convictions.

How do you deal with global opportunities outside the US?

Hiscock: Our approach is benchmark-aware, which means we aim to remain sector- and region-neutral at the portfolio level. Of course, there are exciting opportunities in Europe and Asia, but discipline also means that we consistently invest in line with our approach. This has enabled us to become strong in the long term.

ESG has become an integral part of many investment processes. What about yours?

Hiscock: ESG is embedded in our screening process. Some companies do not make it into the investable universe – Uber, for example, was excluded for a long time due to governance issues. We also want companies in our portfolio that act in a socially responsible manner.

Now, let's look at the major risks: interest rates, inflation and geopolitics.

Hiscock: We are stock pickers, but you can't ignore macroeconomics. Our focus on quality reduces sensitivity to interest rates and inflation. When it comes to geopolitics, we are careful not to become overly dependent on US–China tensions or potential tariffs. No portfolio is immune, but we take these factors into account when making decisions.

How do you protect yourself against setbacks?

Hiscock: Not with derivatives – we only invest in the long term. Our protection lies in the quality of the companies in our portfolio. In the past, we have outperformed our benchmarks during market downturns. This demonstrates that quality can mitigate losses.

Which trends do you currently see as being underestimated?

Hiscock: Quite clearly, artificial intelligence. We are only at the beginning. General AI will follow at some point, but the field is already developing rapidly. All the major players are investing heavily. Even after revaluations, we can still identify attractive opportunities. Looking further ahead, quantum computing is a potentially transformative topic, but it is currently only investable via the major platforms.

Critics often ask about the costs. Why opt for active management when passive strategies broadly reflect the market anyway?

Montrusco Bolton: Passive investing has benefited from momentum in recent years. Ultimately, though, quality and fundamentals are what count. Our job is to build portfolios that exceed institutional requirements, even in difficult markets. Our history shows that we can do this. When the momentum market environment ends, active management will pay off in a big way once again.

Let's take our eyes off the markets for a moment. You run your business from Canada, which is far away from both New York and London.

Hiscock: That's not a disadvantage for large caps in developed markets. We travel when we want to hold talks. In fact, Canada enables us to establish strong partnerships beyond the US. The only slight disadvantage is the distance to some investors, but this can easily be offset by travelling.

In fact, some would argue that this distance brings advantages.

Hiscock: Yes, absolutely. We are less distracted by the daily noise and can see the markets more clearly. There's less herd mentality and more perspective.

Which experiences have had the greatest impact on you as an investor?

Hiscock: My background in engineering physics has given me analytical rigour, which is still important today. Successes and mistakes both shape you, and we have a process for systematically learning from mistakes. Last but not least is building a diverse team. Different perspectives lead to better decisions.

How do you maintain the balance between numerical analysis and intuition?

Hiscock: You need both. Models and figures provide a foundation, but experience and intuition are essential for management quality and strategic judgement. It is this combination that makes for successful investing.

Away from markets and balance sheets, how do you find balance?

Hiscock: My young family grounds me and takes my mind off the markets. I also maintain an active social life with friends from a variety of different fields. This helps me clear my head and return with a fresh perspective.


^{Note: This interview was conducted in collaboration with private banking magazine and was first published on private-banking-magazin.de on 7 October 2025 (German version only).}