Sir Christopher Hohn’s TCI Fund Management has achieved a new record in the hedge fund world, generating a staggering US$18.9 billion profit last year. According to estimates by Edmond de Rothschild, this performance surpasses previous records, including Citadel’s US$16 billion gain in 2022 and John Paulson’s US$15 billion in 2007. TCI Fund Management, which manages US$77 billion, focuses on high-quality companies with sustainable competitive advantages.
Hohn’s investment strategy stands out for its simplicity and long-term focus. Unlike many hedge funds employing complex strategies, TCI concentrates on a small portfolio of approximately 15 holdings, maintaining an average hold period of eight years. The company operates with a lean investment team of only seven or eight people. TCI Fund Management was founded in 2004 as The Children’s Investment Fund Management, and is tied to a foundation that has donated billions to philanthropic causes.
TCI’s portfolio includes tech giants like Microsoft and Alphabet, but Hohn’s success last year was largely driven by aircraft engine makers General Electric and Safran. Hohn identifies companies with significant barriers to entry, such as Visa’s global network and Aena’s near-monopoly on Spanish airports. He also emphasizes the importance of long-term thinking and portfolio concentration, limiting TCI’s investment universe to around 200 companies.
Hohn’s approach, rooted in identifying enduring competitive advantages and maintaining a concentrated, long-term portfolio, has proven remarkably successful. His focus on ‘consciousness and love’ and the integration of philanthropy into his work sets him apart in the financial world, proving that simple principles, consistently applied, can yield extraordinary results.
