Offshore

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Dimitry Nakhla | Babylon Capital®
Chris Hohn is a legend & this post by @aakashgupta is beautifully written 📝

My favorite line:

“He did it by becoming the opposite of what made him famous.”

That line hits hard because it captures the rarest trait in investing: humility.

Most people double down on their identity when things go wrong. The great ones evolve — they adapt, simplify, and rebuild their process around what actually works.

In markets, reinvention after failure isn’t a weakness — it can be the source of the next decade of exceptional results.



Hohn’s story is wild.

In 2008, he lost 43% and watched his fund collapse from $19 billion to under $5 billion. Investors fled. He publicly swore off activism after getting humiliated in a railroad proxy fight.

17 years later, he just posted the largest single-year hedge fund profit in history.

Here’s what happened in between:

From 2003 to 2007, Chris Hohn was the golden boy of activist investing. He ran TCI like a wrecking ball. Bought 1% of ABN Amro and sent a scathing letter demanding breakup. Triggered a $100 billion bidding war at the peak of the market. Forced out the CEO of Deutsche Börse after killing their London Stock Exchange bid. German politicians called him a “locust.” He didn’t care. Assets soared 30-fold in five years.

Then 2008 hit.

TCI lost 43%. His CSX railroad battle turned into a public disaster when the stock dropped 50% after he won four board seats. He declared defeat, sold his shares, and told the press he was done with activism. By 2012, assets had collapsed to $4.9 billion. Most of his team quit.

What most people don’t know is what Hohn did next.

He looked at his portfolio and realized he’d been playing the wrong game. Special situations. Distressed plays. Banks. He’d strayed from concentration into complexity.

So he rebuilt TCI around a single thesis: own monopolies.

Not “companies with moats.” Actual monopolies. His test: can they price above inflation? If competition can compress margins, he walks. Airlines grow 5% annually and make no money. Airports grow 5% annually and print cash. He wants the airports.

The result is a 10-stock portfolio where GE Aerospace represents 23% of a $50 billion fund. Five holdings account for 73%. Portfolio turnover sits at 21%. Average holding period rivals some marriages.

Griffin’s $16 billion record in 2022 came from running hundreds of strategies across thousands of positions with 2,900 employees. Hohn’s $18.9 billion came from sitting in credit rating agencies and aerospace duopolies for a decade with a team of 8.

Same destination. Opposite paths.
Citadel wins by being everywhere during chaos. TCI wins by being nowhere except inside tollbooths.

The real lesson here: Hohn turned a 43% drawdown and near-total investor exodus into the highest annual profit any hedge fund has ever generated. He did it by becoming the opposite of what made him famous. Less activism, more patience. Fewer stocks, longer holds. No banks, no airlines, just monopolies that can raise prices faster than inflation.

Sometimes the real alpha comes from nearly losing everything.

- Aakash Gupta
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