For-profit

The Children’s Investment Management Fund (TCI)

Website:

www.tcifund.com

Location:

London, United Kingdom

Formation:

2003

Founders:

Christopher Hohn

Jaimee Cooper

The Children’s Investment Management Fund (TCI) is a for-profit hedge fund created by British billionaire Christopher Hohn, a funder of the radical environmentalist group Extinction Rebellion. [1]

TCI manages around £23 billion (approximately $30 billion) in assets[2] and holds shares in companies including Alphabet, Microsoft, Anthem, VISA, Adobe Systems, and Equifax. [3]

TCI is an environmental-social-governance (ESG)-related fund that takes activist left-of-center positions and uses internal pressure campaigns to compel companies’ management to adopt them. It has acquired a 1% stake in the Indian state-controlled mining and refinery company Coal India,[4] and lists major holdings such as the Canadian National Railway Company, Canadian Pacific Railway, Union Pacific, and Raytheon. [5]

Background

The Children’s Investment Fund Management (TCI) was founded in 2003 by Christopher Hohn, a hedge-fund manager and billionaire, and his now ex-wife Jaimee Cooper (nee Jaimee Cooper-Hohn). The couple created TCI to funnel 1% of its assets to the fund’s charitable arm, The Children’s Investment Fund Foundation (CIFF),[6] which claims to help improve “the lives of children in developing countries who live in poverty.” [7] A RealClearInvestigations article published on January 6, 2020, found evidence that the organization has been used by Hohn to pass money towards environmental campaigns and other foundations pushing for legal action against energy companies due to the cost of climate change. [8]

The Children’s Investment Fund Management charges investors a management fee of approximately 2% and takes 20% of the profits made by the investment. [9] TCI manages around £23 billion (approximately $30 billion) in assets. [10]

Environmental Policy

The Children’s Investment Fund Management lists an active environmental-social-governance (ESG) policy on its website. According to TCI, it assesses “a range of ESG factors, particularly climate change risk.” TCI also has a “Climate Change” button on its website which links to the Children’s Investment Fund Foundation’s website. [11]

CIFF has taken the position that carbon must be removed from the power sector by “phasing out coal and increasing the uptake of renewables worldwide.” [12]

TCI also sent a letter to multiple large companies which it invests in, including Google and Airbus, stating that TCI would “typically vote against all directors of companies which do not publicly disclose all of their emissions and do not have a credible plan for their reduction,” and warned that TCI will consider selling shares of companies that do not disclose climate risks. Hohn also added that if governments did not force companies to disclose its pollution “investors can force it themselves.” [13]

Controversial Investing

Despite claiming to be a supporter of environmentalism, TCI has invested a large number of assets into fossil fuel producers and transport organizations.

The Children’s Investment Fund Management acquired a 1% stake, worth approximately $414 million, in the Indian state-controlled mining and refinery company Coal India, which produces around 80% of India’s coal. The stake was attained by TCI in the quarter ending June 2011 from two subsidiaries, TCI Cyprus Holding and Talos Capital. [14]

TCI filed two lawsuits in 2012, one against Coal India and the other against the Indian Government. While TCI claimed the Indian Government was “intervening in a diplomatic way and not supporting minority shareholders in a fair manner,” the hedge fund also contended against Coal India’s sale price of coal. According to TCI, Coal India sold coal at 70% less than the market price, which breaches Coal India’s duty to maximize shareholder profits. TCI claimed it lost close to $19 billion due to the pricing policy. [15] Eventually in 2014, two years after filing the lawsuits, TCI sold its stake in Coal India. [16]

The Children’s Investment Fund Management also holds major stakes in multiple transportation companies.

TCI has a stake worth approximately £1.4 billion (just over $1.8 billion) in the Canadian National Railway Company. The railway company pleaded guilty to environmental offenses in 2017 after it was found responsible for massive spills of diesel flowing into a river. One of the companies’ trains derailed in 2005, spilling 10,000 gallons of caustic soda into a river which resulted in the death of around half a million fish. [17]

The hedge fund also has an 8% stake worth around £2.2billion (approximately $2.8 billion) in Canadian Pacific Railway. The rail company was fined in 2019 for waste management failures. A train derailed in the same year, resulting in more than 300,000 gallons of crude oil being spilled. [18]

TCI holds a major stake worth more than £500 million (approximately $650 million) in the United States-based railway company Union Pacific. The company is being investigated for breaking environmental laws after reports of cancer increased near a rail yard where railway sleepers had been treated with creosote. Union Pacific also admitted in 2019 that the groundwater beneath local residents’ homes had been contaminated. [19]

Reports from 2020 identified TCI as having held a major position in the airplane manufacturer Airbus;[20] as the second-largest investor in the owner of the Eurotunnel, Getlink;[21] and as invested in the chemicals company Univar Solutions. TCI also possesses a 2% stake in the American missile maker Raytheon, which agreed to compensate Floridian residents due to groundwater contamination[22] and was forced by the United States Environmental Protection Agency to clean up the contaminated groundwater at Tucson Airport. [23] TCI bought more than 5,500,000 shares of Raytheon in 2019, increasing its original share ownership percentage by 482%. [24]

According to a 2020 listing on TCI’s holdings, the hedge fund has shares in a variety of companies, which include Alphabet, Microsoft, Anthem, VISA, Adobe Systems, and Equifax. [25]

People

The Children’s Investment Fund Management is owned and operated by Christopher Hohn, an English hedge fund manager and billionaire born in 1966 to a Jamaican-born car mechanic. Hohn studied at Southampton University before moving to America to study for an MBA at Harvard Business School, where he received the award of Baker Scholar. While studying at Harvard Business School, Hohn met his ex-wife Jaimee Cooper-Hohn (now known as Jaimee Cooper). [26]

After leaving Harvard Business School, Hohn began working on Wall Street for the hedge fund Perry Capital, where he stayed for seven years and earned an estimated £75 million (approximately $97.5 million). [27]

Hohn was forced to pay £337 million (approximately $440 million) to Cooper in 2014 after the pair divorced[28] but is still listed as one of the top ten earning hedge-fund managers in the world and was ranked as one of the 125 richest people in the United Kingdom as of 2019 with a personal fortune of £1.2 billion (approximately $1.56 billion). [29] However, other sources list him as having a total net worth of $5 billion. [30]

Hohn is also known for personally contributing £50,000 (approximately $65,000) to the radical environmental activist organization, Extinction Rebellion (XR),[31] which was created in the United Kingdom in mid-2019 from a network of individuals affiliated with Earth First! and Occupy Wall Street. [32]

References

  1. Gilbert, Mark. “The Hedge Fund Industry Gets Its Own Greta Thunberg.” Bloomberg.com. Bloomberg, December 2, 2019. https://www.bloomberg.com/opinion/articles/2019-12-02/christopher-hohn-goes-extinction-rebellion-on-hedge-fund-industry. ^
  2. Nimmo, Jamie. “Climate Rebel Tycoon Nets Tainted Millions.” This is Money. This Is Money, January 26, 2020. https://www.thisismoney.co.uk/money/news/article-7929379/How-Extinction-Rebellions-British-hedge-fund-backer-profits-dirty-firms.html. ^
  3. “THE CHILDREN’S INVESTMENT FUND MANAGEMENT (UK) LLP.” WhaleWisdom Articles RSS 092. Accessed March 6, 2020. https://whalewisdom.com/filer/childrens-investment-fund-management-uk-llp#tabholdings_tab_link. ^
  4. Jain, Shravya. “TCI’s Christopher Hohn All Set to Take Coal India and Govt to Court.” India Today, May 3, 2012. https://www.indiatoday.in/magazine/economy/story/20120507-london-based-hedge-fund-coal-india-christopher-hohn-758232-2012-04-27. ^
  5. Nimmo, Jamie. “Climate Rebel Tycoon Nets Tainted Millions: How Extinction Rebellion’s British Hedge Fund Backer Profits from ‘Dirty’ Firms.” MSN, January 25, 2020.. https://www.msn.com/en-gb/money/other/climate-rebel-tycoon-nets-tainted-millions-how-extinction-rebellions-british-hedge-fund-backer-profits-from-dirty-firms/ar-BBZkuOl?ocid=se. ^
  6. Reporter, Daily Mail. “City High-Flier Is UK’s Most Generous Donor.” This is Money. This Is Money, June 29, 2006. https://www.thisismoney.co.uk/money/news/article-1599999/City-high-flier-is-UKs-most-generous-donor.html. ^
  7. “Who We Are.” CIFF. Accessed March 6, 2020. https://ciff.org/about-us/who-we-are/. ^
  8. “Not American, but He’s Got a Rich Footprint in U.S. Environmental Politics.” RealClearInvestigations. Accessed March 6, 2020. https://www.realclearinvestigations.com/articles/2020/01/06/a_british_billionaires_big_investments_in_us_environmental_politics_121359.html. ^
  9. Reporter, Daily Mail. “City High-Flier Is UK’s Most Generous Donor.” This is Money. This Is Money, June 29, 2006. https://www.thisismoney.co.uk/money/news/article-1599999/City-high-flier-is-UKs-most-generous-donor.html. ^
  10. Nimmo, Jamie. “Climate Rebel Tycoon Nets Tainted Millions.” This is Money. This Is Money, January 26, 2020. https://www.thisismoney.co.uk/money/news/article-7929379/How-Extinction-Rebellions-British-hedge-fund-backer-profits-dirty-firms.html. ^
  11. Tci. “ESG Investment Policy.” TCI. Accessed March 6, 2020. http://www.tcifund.com/OurPolicy. ^
  12. “Climate Change.” CIFF. Accessed March 6, 2020. https://ciff.org/priorities/climate-change/. ^
  13. Ben Chapman @b_c_chapman. “Hedge Fund Billionaire Vows to Punish Company Directors for Climate Change Inaction.” The Independent. Independent Digital News and Media, December 3, 2019. https://www.independent.co.uk/news/business/news/chris-hohn-hedge-fund-climate-change-crisis-punish-company-directors-a9229946.html. ^
  14. Jain, Shravya. “TCI’s Christopher Hohn All Set to Take Coal India and Govt to Court.” India Today, May 3, 2012. https://www.indiatoday.in/magazine/economy/story/20120507-london-based-hedge-fund-coal-india-christopher-hohn-758232-2012-04-27. ^
  15. Jain, Shravya. “TCI’s Christopher Hohn All Set to Take Coal India and Govt to Court.” India Today, May 3, 2012. https://www.indiatoday.in/magazine/economy/story/20120507-london-based-hedge-fund-coal-india-christopher-hohn-758232-2012-04-27. ^
  16. Crabtree, James. “Activist TCI Drops Coal India Campaign and Sells Stake.” Subscribe to read | Financial Times. Financial Times, October 14, 2014. https://www.ft.com/content/604b0aae-53a8-11e4-929b-00144feab7de. ^
  17. Nimmo, Jamie. “Climate Rebel Tycoon Nets Tainted Millions: How Extinction Rebellion’s British Hedge Fund Backer Profits from ‘Dirty’ Firms.” MSN, January 25, 2020.. https://www.msn.com/en-gb/money/other/climate-rebel-tycoon-nets-tainted-millions-how-extinction-rebellions-british-hedge-fund-backer-profits-from-dirty-firms/ar-BBZkuOl?ocid=se. ^
  18. Nimmo, Jamie. “Climate Rebel Tycoon Nets Tainted Millions: How Extinction Rebellion’s British Hedge Fund Backer Profits from ‘Dirty’ Firms.” MSN, January 25, 2020. https://www.msn.com/en-gb/money/other/climate-rebel-tycoon-nets-tainted-millions-how-extinction-rebellions-british-hedge-fund-backer-profits-from-dirty-firms/ar-BBZkuOl?ocid=se. ^
  19. Nimmo, Jamie. “Climate Rebel Tycoon Nets Tainted Millions: How Extinction Rebellion’s British Hedge Fund Backer Profits from ‘Dirty’ Firms.” MSN, January 25, 2n.d.. https://www.msn.com/en-gb/money/other/climate-rebel-tycoon-nets-tainted-millions-how-extinction-rebellions-british-hedge-fund-backer-profits-from-dirty-firms/ar-BBZkuOl?ocid=se. ^
  20. “Not American, but He’s Got a Rich Footprint in U.S. Environmental Politics.” RealClearInvestigations. Accessed March 6, 2020. https://www.realclearinvestigations.com/articles/2020/01/06/a_british_billionaires_big_investments_in_us_environmental_politics_121359.html. ^
  21. Boscia, Stefan. “Sir Christopher Hohn Buys Stake in Heathrow Airport.” CityAM, October 20, 2019. https://www.cityam.com/extinction-rebellion-patron-buys-stake-in-heathrow-airport/. ^
  22. Nimmo, Jamie. “Climate Rebel Tycoon Nets Tainted Millions: How Extinction Rebellion’s British Hedge Fund Backer Profits from ‘Dirty’ Firms.” MSN, January 25, 2020.. https://www.msn.com/en-gb/money/other/climate-rebel-tycoon-nets-tainted-millions-how-extinction-rebellions-british-hedge-fund-backer-profits-from-dirty-firms/ar-BBZkuOl?ocid=se. ^
  23. “EPA Orders Raytheon, Air Force to Clean up Contaminated Groundwater at Tucson Airport Superfund Site.” EPA. Environmental Protection Agency, May 15, 2008. https://archive.epa.gov/epapages/newsroom_archive/newsreleases/71b1922ba7a0e61c8525731700688dd7.html. ^
  24. “THE CHILDREN’S INVESTMENT FUND MANAGEMENT (UK) LLP.” WhaleWisdom Articles RSS 092. Accessed March 6, 2020. https://whalewisdom.com/filer/childrens-investment-fund-management-uk-llp#tabholdings_tab_link. ^
  25. “THE CHILDREN’S INVESTMENT FUND MANAGEMENT (UK) LLP.” WhaleWisdom Articles RSS 092. Accessed March 6, 2020. https://whalewisdom.com/filer/childrens-investment-fund-management-uk-llp#tabholdings_tab_link. ^
  26. Bloxham, Andy. “Chris Hohn Profile: Britain’s Biggest Charity Donor.” The Telegraph. Telegraph Media Group, June 20, 2008. https://www.telegraph.co.uk/news/uknews/2166369/Chris-Hohn-profile-Britains-biggest-charity-donor.html. ^
  27. Bloxham, Andy. “Chris Hohn Profile: Britain’s Biggest Charity Donor.” The Telegraph. Telegraph Media Group, June 20, 2008. https://www.telegraph.co.uk/news/uknews/2166369/Chris-Hohn-profile-Britains-biggest-charity-donor.html. ^
  28. Mailonline, Ed Riley For. “Billionaire Fights £270m Supreme Court Battle with Ex-Wife Who Already Won £337m from Him.” Daily Mail Online. Associated Newspapers, January 14, 2020. https://www.dailymail.co.uk/news/article-7885829/Billionaire-fights-270m-Supreme-Court-battle-ex-wife-won-337m-him.html. ^
  29. Mailonline, Ed Riley For. “Billionaire Fights £270m Supreme Court Battle with Ex-Wife Who Already Won £337m from Him.” Daily Mail Online. Associated Newspapers, January 14, 2020. https://www.dailymail.co.uk/news/article-7885829/Billionaire-fights-270m-Supreme-Court-battle-ex-wife-won-337m-him.html. ^
  30. “Christopher Hohn.” Forbes. Forbes Magazine. Accessed March 6, 2020. https://www.forbes.com/profile/christopher-hohn/. ^
  31. Gilbert, Mark. “The Hedge Fund Industry Gets Its Own Greta Thunberg.” Bloomberg.com. Bloomberg, December 2, 2019. https://www.bloomberg.com/opinion/articles/2019-12-02/christopher-hohn-goes-extinction-rebellion-on-hedge-fund-industry. ^
  32. “Extinction Rebellion: The Story behind the Activist Group.” BBC News. BBC, December 21, 2018. https://www.bbc.co.uk/news/av/science-environment-46626582/extinction-rebellion-the-story-behind-the-activist-group. ^
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The Children’s Investment Management Fund (TCI)

7 Clifford St, Mayfair
London,
United Kingdom