Assets Under Management AUM

Chris Hohn’s 13F TCI Fund Management Portfolio – Q1 2022 Update

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This article is the first in a series that provides an ongoing analysis of changes to TCI Fund Management’s 13F portfolio on a quarterly basis. It is based on their regulatory Form 13F filed on 05/16/2022.

TCI Fund Management was founded by Chris Hohn in 2003. The fund was unique in that its fee structure was contractually obligated to include philanthropy – 50 basis points of the management fee pledged to the Children’s Investment Fund Foundation. The contractual obligation was halted during the financial crisis after the fund suffered a drop of around 43% in 2008. Chris Hohn is still the foundation’s chairman and has distributed around $3 billion so far. TCI holds highly concentrated holdings based on extensive fundamental research and frequently engages in shareholder activism. Performance since inception has been exceptional at around 18% annualized, versus around half that of the S&P 500.

Assets under management (AuM) are approximately $40 billion. This quarter, the value of TCI Fund Management’s 13F portfolio decreased by approximately 17%, from $44.44 billion to $36.84 billion. The number of positions has shrunk from 12 to 10. The top three holdings are around 50%, while the top five account for around 75% of 13F’s assets: Alphabet, Microsoft, Canadian National Railways, Railroad Canadian Pacific and Visa.

Bet increase:

Microsoft Corporation (MSFT): MSFT is the second largest position at 14.45% of the portfolio. It was built in the 2017-18 period at prices between ~$60 and ~$115. There was a ~50% sale in 2019 at prices between ~$100 and ~$160. Recent activity follows: the first quarter of 2021 saw an increase of approximately 45% at prices between ~$213 and ~$245, while in the third quarter of 2021 there was a sale of approximately 20 % at prices between ~$275 and ~$304. The stock is currently trading at ~$265.

S&P Global Inc. (SPGI): SPGI’s large 7.60% portfolio stake was first purchased in 2017 and built in 2019 at prices up to ~$275. The first quarter of 2021 saw a ~150% stake increase at prices between ~$306 and ~$362, while in the second half of 2021 there was a ~37% sale at prices between ~$306 and ~$362. priced between ~$415 and ~$475. There was a roughly 80% stake increase this quarter at prices between ~$373 and ~$461. The stock is currently trading at ~$352.

Moody’s Corp. (MCO): MCO is a 6.67% position that has been in the portfolio since their first 13F filing in Q2 2015. At the time, the stake was already quite large at 3.9 million shares. The position wavered. Stake nearly sold out in 2016 at prices between ~$80 and ~$110. The 2017-2018 period saw the position rebuilt at prices between ~$98 and ~$185. Since then, activity has remained minor. The stock is currently trading at ~$284. This quarter saw an increase of approximately 11%.

The bet decreases:

Alphabet Inc. (GOOG) (GOOGL): GOOG is by far the largest position with ~22% of the portfolio. It was first purchased in 2017 at prices between ~$805 and ~$1,100. Next year, the stake was built at prices between ~$980 and ~$1,240. Since then, activity had been minor. There were ~18% sales this quarter at prices between ~$2,529 and ~$2,961. The stock is currently trading at ~$2330.

Visa Inc. (V): The ~12% of Visa’s portfolio was built in 2020 at prices between ~$147 and ~$219. The last two quarters had seen an ~64% increase in stake at prices between ~$196 and ~$249, while this quarter there was a ~14% reduction at prices between ~ $191 and ~$235. The stock is now at ~$205.

Boston Properties (BXP): BXP represents ~4% of the portfolio position established during Q2-Q4 2020 at prices between ~$31 and ~$42. Q2 and Q3 2021 saw an increase in participation of ~48% at prices between ~$39 and ~$46. The stock is currently trading at $37.51. The last two quarters have seen minor cuts.

Note: They have an approximate 7.5% stake in the company.

Union Pacific (UNP): The 3.90% stake in UNP was purchased in 2018 at prices between ~$127 and ~$165. Next year, about a third sold at prices between ~$138 and ~$181. 2020 saw an increase in stake of around 20% at prices between ~$118 and ~$210. There was a roughly 15% reduction this quarter at prices between ~$238 and ~$277. The stock is currently trading at ~$210.

Communications Charter (CHTR): A significant stake in CHTR was established in 2016 at prices between ~$165 and ~$300. The position wavered. Recent activity follows. There has been around 80% selling over the last three quarters at prices between ~$426 and ~$821. The stock is currently trading at around $453 and the stake is now relatively low at around 3% of the portfolio.

Maintained stable:

Canadian National Railway (CNI): CNI is in the top three 13.36% of portfolio position built during 2018-19 at prices between ~$71 and ~$95. Q2 and Q3 2021 saw a ~75% increase in stake at prices between ~$104 and ~$127. The stock is currently trading at around $112.

Note: They have an approximate 5.2% stake in the company.

Canadian Pacific (CP): CP’s large 12.51% stake was purchased in 2018-19 at prices between ~$34 and ~$51. There was a slight increase the next year, but since then the position has remained stable. The stock is currently trading at $71.89.

Note: They own about a 6% stake in the company.

The spreadsheet below highlights changes to TCI Fund Management’s 13F holdings in Q1 2022:

Chris Hohn - Q/Q Comparison of TCI Fund Management Q1 2022 13F Report

Chris Hohn – Q/Q Comparison of TCI Fund Management Q1 2022 13F Report (John Vincent (author))