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

This article is first in a series that provides an ongoing analysis of the changes made to TCI Fund Management’s 13F portfolio on a quarterly basis. It is based on their regulatory 13F Form filed on 5/16/2022.

TCI Fund Management was founded by Chris Hohn in 2003. The fund was unique in that their fee structure was contractually obligated to include philanthropy – 50 basis points of the management fee pledged to Children’s Investment Fund Foundation. The contractual obligation was stopped during the financial crisis after the fund went through a ~43% drawdown in 2008. Chris Hohn is still the chairman of the foundation and has given away ~$3B so far. TCI holds highly concentrated stakes based on deep fundamental research and engages in shareholder activism frequently. Performance since inception has been exceptional at ~18% annualized compared to around half that for the S&P 500 Index.

Assets Under Management (AuM) is at around $40B. This quarter, TCI Fund Management’s 13F portfolio value decreased ~17% from $44.44B to $36.84B. The number of positions decreased from 12 to 10. The top three holdings are at ~50% while the top five are close to ~75% of the 13F assets: Alphabet, Microsoft, Canadian National Railway, Canadian Pacific Railway, and Visa.

Stake Increases:

Microsoft Corporation (MSFT): MSFT is the second-largest position at 14.45% of the portfolio. It was built in the 2017-18 timeframe at prices between ~$60 and ~$115. There was a ~50% selling in 2019 at prices between ~$100 and ~$160. Recent activity follows: Q1 2021 saw a ~45% increase at prices between ~$213 and ~$245 while in Q3 2021 there was a ~20% selling at prices between ~$275 and ~$304. The stock currently trades at ~$265.

S&P Global Inc. (SPGI): The large 7.60% of the portfolio SPGI stake was first purchased in 2017 and built in 2019 at prices up to ~$275. Q1 2021 saw a ~150% stake increase at prices between ~$306 and ~$362 while in H2 2021 there was a ~37% selling at prices between ~$415 and ~$475. There was a ~80% stake increase this quarter at prices between ~$373 and ~$461. The stock currently trades 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 fairly large at 3.9M shares. The position has wavered. The stake was almost sold out in 2016 at prices between ~$80 and ~$110. The 2017-2018 timeframe saw the position rebuilt at prices between ~$98 and ~$185. Since then, the activity has been minor. The stock currently trades at ~$284. This quarter saw a ~11% increase.

Stake Decreases:

Alphabet Inc. (GOOG) (GOOGL): GOOG is by far the largest position at ~22% of the portfolio. It was first purchased in 2017 at prices between ~$805 and ~$1100. Next year saw the stake built at prices between ~$980 and ~$1240. Since then, the activity had been minor. There was a ~18% selling this quarter at prices between ~$2529 and ~$2961. The stock currently trades at ~$2330.

Visa Inc. (V): The ~12% of the portfolio stake in Visa was built in 2020 at prices between ~$147 and ~$219. Last two quarters had seen a ~64% stake increase 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 is a ~4% of the portfolio position established during Q2-Q4 2020 at prices between ~$31 and ~$42. Q2 & Q3 2021 saw a ~48% stake increase at prices between ~$39 and ~$46. The stock currently trades at $37.51. Last two quarters have seen minor trimming.

Note: they have a ~7.5% ownership stake in the business.

Union Pacific (UNP): The 3.90% UNP stake was purchased in 2018 at prices between ~$127 and ~$165. Next year saw a roughly one-third selling at prices between ~$138 and ~$181. 2020 saw a ~20% stake increase at prices between ~$118 and ~$210. There was a ~15% trimming this quarter at prices between ~$238 and ~$277. The stock currently trades at ~$210.

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

Kept Steady:

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

Note: they have a ~5.2% ownership stake in the business.

Canadian Pacific (CP): The large 12.51% CP stake was purchased during 2018-19 at prices between ~$34 and ~$51. There was a minor increase next year but since then the position has been kept steady. The stock currently trades at $71.89.

Note: they have a ~6% ownership stake in the business.

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