Chris Hohn: Reinforcing Compounders While Trimming Tech & Rail Exposure

The latest 13F filing from TCI Fund Management offers a crisp look at how Chris Hohn continues to express a long-duration, quality-compounder equity strategy while tactically adjusting position sizes amid a more uncertain macro backdrop.

TCI remains one of the cleanest expressions of global quality investing — concentrated, benchmark-agnostic, and fundamentally driven. The portfolio continues to favor high-ROIC businesses with pricing power, recurring revenues, and strong competitive moats. The latest quarter’s filing shows material adds to payments, selective trims in mega-cap tech and North American railroads, and a full exit in a major communication platform.

Below are the most notable positioning shifts and what they suggest about TCI’s posture:

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1. Visa (V): +8,989,793 shares

28.06M shares — $9.58B position (18.2% of portfolio)

Visa was the largest absolute add this quarter, with TCI increasing its exposure by 47%.

Payments remains one of TCI’s highest-conviction secular themes, underpinned by the structural shift from cash to electronic transactions, network effects, and global revenue scalability. The size of the add signals confidence that Visa’s pricing power, operating leverage, and cross-border recovery remain underappreciated relative to broader market uncertainty.

This is textbook Hohn: add aggressively to a world-class compounding machine when volatility creates entry points.

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2. S&P Global (SPGI): +98,247 shares

11.19M shares — $5.45B position (10.3%)

TCI modestly increased its stake in SPGI, maintaining it as a top-five holding.

S&P’s data, index, and analytics franchises benefit from recurring revenue, regulatory barriers, and secular growth in financial infrastructure. The incremental add appears to reflect steady reinforcement rather than a new thesis pivot — consistent with TCI’s long-term accumulation strategy in mission-critical data assets.

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3. Moody’s Corp (MCO): +61,500 shares

13.31M shares — $6.34B position (12.0%)

Moody’s also saw a small add, lifting exposure further into the top tier of the portfolio.

TCI has long favored credit rating agencies due to oligopolistic market structure, global pricing power, and low capital intensity. Incremental increases here further signal Hohn’s conviction that credit issuance volatility is cyclical noise rather than structural impairment.

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4. Microsoft (MSFT): −973,027 shares

16.59M shares — $8.59B position (16.3%)

Microsoft was trimmed by approximately 5.5%.

Trimming MSFT — still a top-three holding — likely reflects portfolio weight management rather than thesis deterioration, particularly after significant outperformance in AI and enterprise software. Given Microsoft’s size within TCI, modest trimming helps control concentration while still maintaining substantial exposure to the AI compute stack.

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5. Canadian Pacific Kansas City (CP): −2,961,150 shares

49.87M shares — $3.71B position (7.0%)

TCI reduced exposure to CP by roughly 5.6%.

Railroad positioning remains a core theme within TCI, but cyclical softness in freight volumes and pricing normalization post-merger have likely driven a more balanced sizing approach. The trim suggests risk management rather than a shift away from the structural rail thesis.

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6. Alphabet (GOOG): −5,369,416 shares

7.60M shares — $1.85B position (3.5%)

Alphabet saw one of the largest percentage trims at −41%.

This is notable given Alphabet’s status as a mega-cap growth leader. The reduction likely reflects heightened competitive dynamics around AI integration, margin volatility from cloud and capex intensity, and regulatory overhangs. TCI appears to prefer franchise visibility and pricing power over platform optionality at this stage.

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7. Canadian National Railway (CNI): −4,221,292 shares

18.77M shares — $1.77B position (3.4%)

CNI was reduced by ~18%, marking the second significant trim in North American rail exposure.

TCI remains deeply involved in rail governance and efficiency optimization, but the cut suggests a pivot toward tighter capital allocation, particularly as rail volumes face cyclical pressure and operational reform faces longer timing arcs.

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8. Full Exit: Alphabet Inc. — Class A (GOOGL)

3.16M shares → 0

TCI fully exited its Alphabet Class A line while retaining a reduced Class C position.

The exit underscores a consolidation of exposure and reduced appetite for platform-risk relative to other mega-cap tech names with more durable revenue predictability.

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Portfolio Context & Themes

Three themes stand out:

1. Structural Compounders > Cyclical Winners

Incremental capital flowed to businesses with long-duration cash compounding characteristics (Visa, Moody’s, S&P), reinforcing TCI’s core identity.

2. Selective Tech De-Risking

Trimming Alphabet and Microsoft shows caution around mega-cap tech valuation dispersion and competitive dynamics in AI deployment.

3. Rail Exposure Right-Sizing

Reductions in CP and CNI point to cyclical positioning discipline rather than thematic abandonment.

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Big Picture Takeaways

TCI is staying true to its mandate: own the best businesses in the world, size with conviction, and allocate incrementally when dislocation creates opportunity.

This quarter’s filing reinforces:

• the primacy of high-ROIC compounders
• disciplined concentration management
• measured reductions in cyclical & AI-exposed megacaps
• consistency over tactical churn

Hohn remains a purist in a hedge fund industry that increasingly blends macro overlays, factor tilts, and thematic optionality. TCI continues to express alpha through simplicity: buy great businesses, size them large, and give them time.