The Children’s Investment Fund

Chris Hohn’s Wife Goes All Patty Cohen On Him

Like the former Mrs. SAC, Jamie Cooper-Hohn suspects that The Children’s Investment Fund founder, who once loved her enough to take her name and to give her a £2 billion charity to play with, is hiding £1.7 billion—or at least several hundred million—in the crevasses of his “modest life.” Read more »

When Chris Hohn set up his hedge fund nine years ago, he came up with a cute little marketing gimmick. He’d give one-third of the fund’s management fees—and a whole lot more if it did well—to a charity benefiting children. He dubbed his creation, The Children’s Investment Fund.

Carl Icahn undoubtedly thinks that the scheme is bullshit, but it (and/or Hohn’s skill/luck in the markets) worked, and now TCI is running almost $10 billion. And he’s built up The Children’s Investment Fund Foundation’s endowment to in excess of £2 billion.

This, evidently, is enough to solve the problems surrounding “child survival, educational achievement, and nutrition and hunger.” Read more »

  • 19 Jun 2012 at 6:09 PM

Doing Well By Doing Financial Reform

There’s a thing called socially responsible investing where
(1) you invest other people’s money,
(2) poorly,
(3) but it’s okay because you’re doing it not to make them money but to save the whales, er, penguins, and they like penguins, so they keep paying your fees. This is a good racket as rackets go but it turns out that people mostly don’t like penguins as much as they like money so it is sort of a limited racket. The trick if you can manage it is to appeal to people who like penguins to give you other people’s money, because people typically like penguins more than they like other people having money. This can be great for you and also for penguins, and for the right value of “you” and “penguins” can be a diabolical way to achieve real social good, which is my favorite.

Two great recent stories in that vein. One is a proposal to use eminent domain to seize underwater mortgages and refloat them. The idea, schematically, is (1) seize property,* (2) sell it back to homeowner at fair value, and (3) lend money to the homeowner to pay for the house, which the municipality then uses to pay fair value to the mortgage lender whose collateral was seized in step (1). Any dope of a municipality could presumably get their act together to do (1) and (2), but the problem is (3) coming up with the money for new mortgages to pay fair value to the old mortgagee. You could see why oh I don’t know BANKS would not like this scheme – it will cost them in servicing rights and refinancing fees and second-lien writedowns** – and so the money has to come from non-banks. Some folks think they can find the money, for a small fee of course, and so are roadshowing the idea to municipalities. It seems to be popular in California, go figure.

The other is this gloriously cynical play from TCI to try to extract some value out of Lloyds Bank while also improving the stability of the British financial system, maybe. Read more »

  • 04 Nov 2009 at 9:36 AM

Troubled TCI Gives Up On Asia

Little more than a year after losing its high-profile proxy battle with Japan’s largest electric utility, The Children’s Investment Fund Management is getting out of Asia entirely.
The Japanese government pulled out all the stops to keep the activist hedge fund from getting its hands on a bigger chunk of Electric Power Development Co., better known as J-Power. But it could hardly imagine that its stand against the “national security threat” presented by TCI would drive the hedge fund off the continent entirely.
Its Japanese defeat–which cost TCI $130 million–was followed earlier this year by the departure of John Ho, the hedge fund’s top executive in Asia and the pointman for its J-Power bid. Last month, TCI closed its Hong Kong office, and the London firm has sold off most of its investments in Asia and has approached other hedge funds in the region about buying what’s left of its portfolios there.

Read more »