Chris Hohn The Man who earned £1 Million/Day | 8 Investing Secrets in Quotes

Sir Chris Hohn is a Billionaire, know as “The UK’s most powerful Hedge Fund Manager”.

Hohn is an activist investor with a focus on Value Investing. Hevhas made headlines recently for earning a stratospheric £1 Million per day in 2020. 

Fun Fact: Hohn has pledged over $2 Billion to charity, which earned himself a knighthood in 2014.

Investing Strategy: Activist investor, Focused, European.

How to Earn £1 Million per day?

In 2020, a year of crisis for many, Sir Chris Hohn paid himself a daily salary which was 9,000 time greater than the UK average! 

Exact figures show Hohn earned £940,000 per day in 2020, a stratospheric salary. 

Hohn’s total pay amounted to £343 Million ($459 Million) and is cited as the single largest amount ever paid to single person in the UK.

Where did the money come from?

Hohn’s runs a hedge Fund called, the Children’s Investment fund (TCI) which recorded a 66% jump in profit during the year. The Fund has £1.4 Billion in assets under management ($1.94 Billion).

How Chris Hohn Become Wealthy?

Sir Christopher Hohn was born in 1966 in Surrey the UK. He came from humble beginnings, his Father was a Car Mechanic who was Born in Jamaica originally and his mother was a Legal Secretary.

Hohn started his Career in Private Equity (Apax Partners) and in 1996 he went to Wall Street to Manage the Perry Capital hedge fund, Hohn earnt approximately £75 million ($100 million) over his two years with the company, according to the Financial Times.

As an Activist Investor, Hohn earned a reputation for being an aggressive investor and was well-known for picking boardroom rights. 

In 2003, Hohn created his own Hedge Fund,  Children’s Investment fund in 2003.  Today Hohn has a Net Worth of an estimated $5.9 Billion.

Children’s Investment Fund

The Children’s Investment Fund (TCI) is a Charity linked Hedge Fund which donated regularly to  The Children’s Investment Fund Foundation, run by his now ex wife.

The funds original setup transferred of 0.5% of the fund’s assets each year, with a extra 0.5% of assets for every year which the fund achieved returns of greater than 11%. 

As Chris divorced from his wife the fund now no longer donates money to the foundation on a contractual basis, though it may do so on a discretionary basis.

Fighting Climate Change

In Recent years Chris Hohn has become a major proponent of stopping Climate Change and has  launched the “Say on climate” initiative.

According to Reuters , this will make companies disclose their greenhouse gas emissions and could even force hundreds of US and European companies to slash their emissions if an annual shareholder vote agrees. 

UK Chancellor connection

Surprisingly the UK Chancellor (Rishi Sunak) used to work for Billionaire Hedge Fund Manager (Chris Hohn). He doesn’t include this on his LinkedIn Profile.

Top 8 Investing Quotes by Chris Hohn

1. Live Modest

“Chris Leads a Modest lifestyle, rents a home, drives a Prius and has worn an old Swatch for years” . Despite being a Billionaire Chris Hohn leads a modest & frugal lifestyle.

From this quote by the Guardian, it seems he doesn’t live flash and buy lots of jets, expensive cars (although he may own them in a low key fashion). At first glance his style seems very similar to Warren Buffett, who has lived in the same modest house since 1955.  

2. Focused Bets 

“By Concentrating our capital in a few good ideas it [hedge fund] can outperform” – Chris Hohn (Billionaire Investor)

Although diversification is heavily touted as the best investment strategy by business school’s, many legendary investors believe the opposite.

Warren Buffett, Bill Ackman, Chris Hohn and many more greats believe in focus. 

They ideally would like to put more money into their best idea where they have real insight than in their 2nd and 3rd best.

This goes against conventional wisdom but actually makes sense as your “circle of competence” can only be so large. It is close to impossible to know everything about everything. 

3. Be a Long Term Investor

“It is painful to lose money, the key for us is to be long term investors” – Chris Hohn (Billionaire Investor).

Many great investors all openly admit to not being able to time the short term moves of the Stock Market & thus investing long term is the key to success.

In the words of the father of value investing Benjamin Graham “In the short run the stock market is a voting machine, in the long run it’s a weighing machine”.

4. Activist Investor

 “Although activism can be disruptive, it doesn’t mean it’s a bad thing for economies” – Chris Hohn (Activist Investor). Hohn is a true Activist Investor similar to Bill Ackman or Carl Ichan.

Activist Investors fight for shareholders and can even replace management in order to increase the shareholder value of the business. Although they ruffle some feathers, there is no doubt they are a vital part of the investment ecology. 

5. Volatility is NOT Risk

“Permanent Loss of Capital is our definition of Risk” – Chris Hohn . Modern Investment Analysis touts Risk as volatility or “Beta”, this is how much a particular stock price moves relative to the index.

Many Legendary investors from Warren Buffett to Ron Baron and Chris Hohn disagree with that statement. They prefer to really on good old fashioned common sense which really say that Risk is the likelihood of you losing your capital permanently.

6. Cash Flow Is King

“We invest into high quality companies with predictable cash flow” – Chris Hohn (Billionaire Investor).

Quality companies with high returns on capital and a great market position often produce predictable cash flow. Investing Legend Bill Ackman has a similar quote. The goal of a value investor is to “Buy cash flows cheap”.

7. Value the Company

“The value of a company is not in one years cash flows but in 20 years” – Chris Hohn

The goal of investing is to lay out cash now, with the view to get more back in the future.

Thus the value of a company is the future cash flows of the business discounted back to today, (as a dollar in the hand is worth more than a promised future dollar). Thus there are three parts to business value, Cash Flows (current), Growth (of cash flows) and Risk (to cash flows).

8. Do your Research

“Hohn has always been a deep value investor, tireless researcher who can make canny judgements” – Chris Hohn.

I see many people blindly buying stocks without having any clue about the business, you may get lucky in the short term but long term this is dangerous. As Benjamin Graham once said “Speculation is akin to gambling”. 

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Chris Hohn Quotes Gallery