Here is How Billionaire Chris Hohn’s Hedge Fund Beat the Market with 33% Gain and His Top 5 Stock Picks

In this article, we take a look at here is how billionaire Chris Hohn’s hedge fund beat the market with 33% gain and his top 5 stock picks. You can read our detailed discussion of Hohn’s investment philosophy, his fund’s performance and go directly to Here is How Billionaire Chris Hohn’s Hedge Fund Beat the Market with 33% Gain and His Top 9 Stock Picks.

5. S&P Global Inc. (NYSE:SPGI)

TCI Fund Management’s Equity Stake: $3.31 Billion
Number of Hedge Fund Holders: 78

S&P Global Inc. (NYSE:SPGI) is one of the companies Hohn turns to for diversifying his holdings in the Financial Services sector. The company offers credit ratings, benchmark analytics, and workflow solutions.

Strong demand for S&P Global Inc. (NYSE:SPGI)’s financial services helped bolster its sentiments in the market, going by the 29% gain in 2023 that allowed billionaire Chris Hohn’s hedge fund to beat the market with a 33% gain.

TCI Fund Management emerged as the predominant stakeholder in S&P Global Inc. (NYSE:SPGI) during Q3, possessing more than 9 million shares in the company. While trading at a price-to-earnings multiple of 56.20, S&P Global also offers a 0.83% dividend yield.

By the end of Q3 2023, 78 hedge funds within Insider Monkey’s database disclosed their holdings in S&P Global Inc. (NYSE:SPGI), marking a slight decrease from the 82 funds in the previous quarter. The combined value of these holdings amounted to approximately $7 billion. 

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4. Visa Inc. (NYSE:V)

TCI Fund Management’s Equity Stake: $3.86 Billion
Number of Hedge Fund Holders: 157

Visa Inc. (NYSE:V) is one of the financial services investment plays that propelled billionaire Chris Hohn’s hedge fund to beat the market with a 33% gain after rallying 25% in 2023. Visa Inc. (NYSE:V) is a company that provides payment technology services. It runs a network that allows payment transactions to be authorized, cleared, and settled. It gained from a strong global economy.

Increased consumer spending saw Visa Inc. (NYSE:V) generate significant returns on fees from its products and solutions in the financial sector. In addition to the share price gain, the TCI Fund Management also benefited from a 0.79% yield as the company continues to reward investors with dividends. The hedge fund held stakes worth $3.86 billion in Visa Inc. (NYSE:V) as of Q3 2023.

By the conclusion of the third quarter in 2023, 167 hedge funds in Insider Monkey’s database possessed stakes valued at $24.4 billion in Visa Inc. (NYSE:V), indicating a slight decrease from the 171 funds in the previous quarter, which held stakes amounting to $24.9 billion.

In its October 2023 investor letter, Lakehouse Capital, an asset management firm, highlighted a few stocks, and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:

“Visa Inc. (NYSE:V) reported a strong result with net revenue increasing 11% year-on-year to $8.6 billion and non-GAAP earnings per share increasing by 21% to $2.33. As has been the case for many years now, the scalable nature of the business allows for revenue growth to outpace its costs, which places the company in a good position to navigate through this inflationary period. The network continues to grow, with credentials and merchant locations up 7% and 17%, respectively. Cross-border travel-related spend also maintained its robust growth, increasing 26% year-on-year while Visa Direct reported 7.5 billion transactions, up 19% year on-year, progressing on penetrating categories such as cross-border remittances. Altogether, we’re pleased with how the business is tracking and remain positive on Visa’s outlook.”

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3. Canadian Pacific Kansas City Limited (NYSE:CP)

TCI Fund Management’s Equity Stake: $4.15 Billion
Number of Hedge Fund Holders: 52

Canadian Pacific Kansas City Limited (NYSE:CP) is another industrial player in the TCI Fund Management investment portfolio, offering exposure to the transportation of bulk commodities, including grain, coal, potash, and fertilizers. Canadian Pacific Kansas City Limited (NYSE:CP) provides rail transportation services through a network of 13,000 miles. 

Canadian Pacific Kansas City Limited (NYSE:CP) was up by about 5% in 2023, rewarding investors with a 0.73% dividend yield. TCI Fund Management held stakes worth $4.15 billion as of Q3 2023. 

At the end of the third quarter of 2023, 52 hedge funds in the database of Insider Monkey held stakes worth $7.61 billion in Canadian Pacific Kansas City Limited (NYSE:CP), compared to the same number of funds in the preceding quarter worth $8.16 billion. 

Here is what Pershing Square Holdings, an asset management firm, said about Canadian Pacific Kansas City Limited (NYSE:CP) in its first half 2023 investor letter:

Canadian Pacific Kansas City Limited (NYSE:CP) is a high-quality business with significant earnings growth potential that operates in an oligopolistic industry with considerable barriers to entry and significant pricing power due to its high-quality, competitive transportation offering. After receiving regulatory approval from the Surface Transportation Board on March 15, Canadian Pacific closed the acquisition of Kansas City Southern on April 14th and renamed the Canadian Pacific Kansas City combined company. …” (Click here to read the full text)

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2. Canadian National Railway Company (NYSE:CNI)

TCI Fund Management’s Equity Stake: $4.43 Billion
Number of Hedge Fund Holders: 39

Canadian National Railway Company (NYSE:CNI) is the second largest holding in the TCI Fund Management portfolio, specializing in offering rail and related transportation business. Canadian National Railway Company (NYSE:CNI)offers rail services, including equipment, custom brokerage, and distribution services.

Canadian National Railway Company (NYSE:CNI) was up by about 6%, helping propel billionaire Chris Hohn’s hedge fund beat the market with a 33% gain. TCI Fund Management held stakes worth $4.42 billion in Canadian National Railway Company (NYSE:CNI) as of the end of the third quarter, putting it in a position to benefit from a 1.91% dividend yield on offer.

As of the end of Q3 2023, 39 hedge funds tracked by Insider Monkey owned stakes in Canadian National Railway Company (NYSE:CNI), compared with 38 in the preceding quarter. The consolidated value of these stakes is over $11.22 billion. Michael Larson’s Bill & Melinda Gates Foundation Trust is the leading stakeholder in the Canadian National Railway Company (NYSE:CNI), with stakes worth $5.94 billion.

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1. General Electric (NYSE:GE)

TCI Fund Management’s Equity Stake: $4.60 Billion
Number of Hedge Fund Holders: 76

General Electric Company (NYSE:GE) was one of the stocks that allowed billionaire Chris Hohn’s hedge fund to beat the market with a 33% gain after rallying 95% in 2023. Operating as a high-tech industrial company that offers gas and steam turbines, General Electric Company (NYSE:GE) benefited from a booming global economy that fuelled demand for its solutions for industrial applications.

Insider Monkey’s examination of the Q3 2023 holdings of 910 hedge funds unveiled that 76 of them had acquired shares of General Electric Company (NYSE:GE). TCI Fund Management, led by Chris Hohn, emerged as the foremost stakeholder in our database, boasting ownership of shares valued at $4.60 billion.

In its Q3 2023 investor letter, Longleaf Partners Fund provided the following insights about General Electric Company (NYSE:GE):

“After a busy first half of the year, we initiated one new position in the quarter in a business we have successfully owned previously and were able to buy again at a discount within a new corporate structure. We opportunistically trimmed and added to several positions throughout the quarter, and we exited General Electric Company (NYSE:GE) and our small position in Hasbro after the share price ran away from us. GE was a multi-year portfolio holding for us that started out rocky but ultimately was a good illustration of owning a “quality” business that was temporarily viewed as “value” (aka, perceived as low quality) before ultimately being weighed properly by the market. CEO Larry Culp was a great partner, creating significant value for shareholders and closing the price-to-value gap. Under his leadership, GE materially improved its operations and is well under way on plans to simplify the business by separating it into three world-class companies. The market has finally caught up with reality versus perception and is pricing GE accordingly. Unfortunately, this means we no longer see a margin of safety for the business but will continue to watch GE and Culp closely and hope to have the opportunity to partner with him again.”

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