Chit Chat Stocks: Chris Hohn—Crushing The Market With Wide Moat Infrastructure Stocks (GE, CP, And...?)

Date: December 3, 2025
Hosts: Brett Schafer & Ryan Henderson
Series: Super Investor Series

Episode Overview

In this episode, hosts Brett Schafer and Ryan Henderson dive deep into the investment style, background, and portfolio of the under-appreciated “super investor” Chris Hohn, founder and portfolio manager of TCI (The Children’s Investment) Fund. They explore Hohn’s journey from humble beginnings to managing $70 billion, dissect his philanthropic drive, and highlight how his focus on infrastructure and monopoly/duopoly “wide moat” stocks has enabled him to deliver 18%+ annual returns over two decades. The episode features case studies (GE Aerospace, Alphabet), a breakdown of his fund’s philosophy, and valuable lessons for investors seeking certainty and durability in their own portfolios.

Chris Hohn’s Background & Early Career

[01:29 – 08:53]

• Not Born Into Wealth:

  • Raised in Surrey, England by a car mechanic (Jamaican father) and legal secretary (British mother).
  • Did not enjoy the finance connections or privileged entry to the industry that many other “super investors” have had.
  • Excelled academically, passing 13 O Levels (vs. the typical 5–10) but "not a boy genius," rather a "very rational and clear thinker." — Ryan Henderson [03:18]

• Path to Finance:

  • Graduated from the University of Southampton (Accounting and Business Economics, First Class Honours, 1988).
  • Recommended for Harvard Business School by a tutor; placed in the top 5% of his class.
  • “...not a super genius like we've seen with some investors, but he's very rational and he's a clear thinker. He is smart, but he doesn't seem to over-complicate things.” — Ryan Henderson [07:16]

• Early Exposure to Philanthropy:

  • Transformative trip to the Philippines post-Southampton: Inspired by witnessing extreme poverty, philanthropy became a core goal early on—unique among major fund managers.

• Private Equity & Early Hedge Fund Days:

  • Worked for Coopers & Lybrand (precursor to PwC).
  • Private equity stint at Apax Partners; influential in forming a "private equity approach" to public markets.
    • "He says they take a private equity approach to their investments and that he wants to own their public equity investments forever." — Ryan Henderson [05:41]
    • "He believes the companies and businesses available in the public markets today are better than the companies available in the private markets." — Ryan Henderson [06:01]
  • Rose quickly at Perry Capital hedge fund, heading its London operations before founding TCI.

TCI Fund: Mission, Structure, and Approach

[10:26 – 15:19]

• Origins & Philosophy:

  • Founded in 2003 as "The Children’s Investment Fund" with a dual mandate: earn high returns and direct profits/fees to charity.
  • Hohn started with a $10M bonus, which he felt he did not need:
    • "He doesn't have a high spend rate lifestyle, so he just gave it to charity... using the profits sent to the firm to donate to charity. Hence the Children's Investment Fund." — Brett Schafer [10:38]
  • Rumored AUM: ~$70B; billions have been donated to charity—Hohn is Britain's “most generous” philanthropist.

• Investment Approach:

  • TCI’s marketing statement:
    • “TCI is a value oriented fundamental investor which invests globally in strong businesses with sustainable competitive advantages. Using a private equity approach, TCI conducts deep fundamental research, constructively engages with management and adopts a long term time horizon… The TCI Master Fund is highly concentrated to maximize alpha.”
      —[12:20]
    • Key Points:
      • Strong, competitively advantaged businesses
      • Alignment with management
      • Long-term horizon
      • High concentration for alpha

• Returns & Team:

  • Estimated 18% annual returns for 20+ years.
  • Amazingly lean: Only 7–8 investment staff for $70B AUM!
    • "It is only seven or eight people according to a Hohn interview… less than 10 people for $70 billion in AUM. I think that is quite impressive and a lean operation…" — Brett Schafer [15:19]

Investing Style: Focus on Wide Moat Infrastructure

[14:01 – 21:33]

• Avoids Complexity & High Competition:

  • Hohn avoids banks, alternative asset managers, competitive retail, and any sector lacking strong moats.
    • “He says no to a lot of stuff. He says no to a ton of industries…if it's competitive, I just avoid it. Retail. Yep.” — Ryan Henderson [14:52]

• Pattern of Monopolies & Duopolies:

  • “He really wants monopolies or duopolies and you actually see that in his portfolio… invested in basically duopolies or local monopolies and it ends up being pretty high quality businesses.” — Ryan Henderson [14:22]
  • Tilt to infrastructure/inelastic demand: Airports, railroads, toll roads, etc.

• Example: Spanish Airports (Aena):

  • Quoting Hohn:
    • "Aena Airport was basically brand new, huge under capacity and 75% of the value was in unregulated shops and car parks. A complete monopoly. Unregulated and huge growth potential. And they sold it at a 15% free cash flow yield. ...You are never building another airport in Madrid. It is an irreplaceable asset." — Brett Schafer quoting Hohn [17:09]

Case Study: GE Aerospace & Saffron (Safran)

[22:09 – 26:31]

• TCI’s Largest Holding: GE Aerospace

  • $14.2B position (as of 2025), started buying in early 2023 during GE’s split and nadir.
  • Focus on the jet engine duopoly: GE and Safran.
  • "[Hohn] likes the market and also owns a chunk in Safran which is one of the competitors in this duopoly because of the high barriers to entry." — Brett Schafer [22:37]

• Hohn on Barriers and Irreplaceability:

  • "It's so complicated to make this product that there have been no new entrants for 50 years. ...And why is that? Not only is it very complicated, but you make the money in the spare parts. ...There isn't room for multiple competitors." — Hohn, quoted [23:26]

• Performance Recap:

  • TCI bought GE Aerospace at ~10x operating earnings; spun-out units (Healthcare, Vernova) ballooned in value; the GE stake has returned 472% since 2023.
  • “Was this not an opportunity to buy an ASML-like asset at 10 times earnings that us and the rest of the market missed?” — Brett Schafer [26:10]

Case Study: Alphabet (Google)—An Activist Episode

[27:39 – 37:38]

• Long-term Holder Turned Critic:

  • Owned since 2017, peaked at over 15% of US holdings, but trimmed to 3.5% post-2022.
  • Became vocal in 2022, publishing open letters to Sundar Pichai advocating staff reductions and cost controls during post-pandemic slowdown.
    • “The company has too many employees and the cost per employee is too high. ...Median compensation totaled $295,000 in 2021; 67% higher than Microsoft.” — Hohn letter quoted by Ryan Henderson [31:38]
  • Google cut 12,000 jobs (6%) two months later, but Hohn pushed for more, arguing "these layoffs did not go far enough."

• On Replacement & Substitution Risk:

  • Hohn concerned about AI/tech disruption risk — less certain about Alphabet’s terminal value than his "hard asset" holdings:
    • “He wants something that is going to be around 10, 20, 30 years from now and he'll have high confidence in that… One thing he does talk about… is not just competition risk, but replacement risk.” — Brett Schafer [36:15]

• Portfolio Trim Turned Mistimed:

  • “...he called Alphabet ‘the riskiest company we own’… kind of funny timing considering that the stock has… doubled in the span of like 6 months, 7 months.” — Ryan Henderson [35:56]

TCI’s Current US Portfolio Breakdown

[37:38 – 43:44]

• Top Holdings (2025):

  1. GE Aerospace (27% of US book)
  2. Visa
  3. Microsoft
  4. Moody's
  5. S&P Global
  6. Canadian Pacific (Railroad)
  7. Alphabet (Google)
  8. Canadian National (Railroad)
  9. Ferrovial (Spanish infrastructure: airports, toll roads, wind farms)

• Common Thread:

  • “If you go through the portfolio...it’s either monopolies, duopolies or massive incumbents.” — Ryan Henderson [48:44]
  • Durability, irreplaceability, and limited competition are central.

Key Takeaways & Lessons

[44:48 – 53:20]

• Returns Speak Louder Than Philosophy:

  • 18% annual over 20+ years places Hohn in the “second tier” of investing legends, not quite Buffett or Soros, but extraordinary nonetheless.

• Concentration & Sizing:

  • “If you're going to have high conviction in an investment…you want it at least to be a sizable position at cost. ...That’s the trifecta of finding something cheap, competitively advantaged and sizing it up aggressively…” — Brett Schafer [39:35]

• Understanding “Replacement Risk”:

  • Hohn looks beyond competition to the likelihood of underlying business models being made obsolete, a key filter in avoiding things like Alphabet or Microsoft as top positions despite their “incumbency.”
  • Preference for “irreplaceable assets": airports, railroads, toll roads, established financial rails like Visa.

• Incumbency & Moat Maintenance:

  • “People underappreciate how much of an advantage a lot of incumbents have.” — Ryan Henderson [51:25]
  • Examples: Microsoft bundling video, or Visa’s network effect.

• Valuation & "Private Equity Approach":

  • Seldom sells winners, ignores much of the "valuation noise", focusing instead on business durability and management alignment.
  • “Private equity approach in public markets—he wants to own it forever.”

Notable Quotes & Memorable Moments

• “You are never building another airport in Madrid. It is an irreplaceable asset.” — Chris Hohn, quoted by Brett [17:09]
• “It's so complicated to make this product (jet engines) that there have been no new entrants for 50 years.” — Chris Hohn, quoted [23:26]
• “Will the business be around? Will we still fly airplanes in 30 years? ... Only a small subset of businesses can be predicted which are the most powerful ones.” — Chris Hohn, quoted by Brett [47:12]
• “If you underestimate the disruption, the undisruptible nature of a railroad, just walk near a railroad for like, I don't know, a few miles... Could someone build this all over again all the way across the country?” — Ryan Henderson [49:37]
• “If I were extremely wealthy, this is pretty much the exact type of portfolio that I would want.” — Ryan Henderson [49:59]

Episode Flow / Timestamps for Key Segments

• Intro & Background: [00:32 – 08:53]
• Philosophy & Fund Overview: [10:26 – 15:19]
• Infrastructure Approach & Airports Example: [15:19 – 21:33]
• GE Aerospace Deep Dive: [22:09 – 26:31]
• Alphabet "Activist" Case: [27:39 – 37:38]
• Portfolio Walkthrough: [37:38 – 43:44]
• Framework, Takeaways, and Closing Thoughts: [44:48 – 54:58]

Final Thoughts

Chris Hohn and TCI Fund offer a powerful, “boring” lesson: Focus relentlessly on high-quality, irreplaceable, monopoly/duopoly infrastructure businesses (airports, railroads, toll roads, network rails) and hold them with conviction, eschewing hot sectors and complicated industries. Philanthropy is foundational, not an afterthought. His results—18% compounded with a tiny, focused team—prove that such patient, concentrated investing works, even at scale.

Recommended Next Steps:

• Listen to Chris Hohn’s rare interviews for more direct wisdom.
• Review TCI’s filings for ideas and sector trends.
• Consider which businesses in your own portfolio can truly withstand the test of time—and which could fall prey to "replacement risk."

(Summary faithfully preserves the hosts’ tone, key quotes, and highlights, skipping all ads, intros, and non-content sections.)