Wed. Jul 6th, 2022

Hedge fund manager Sir Chris Hohn once made a point of telling a high court judge that he was an “unbelievable moneymaker”. This week Hohn proved his point – definitively – when it was revealed that he paid himself just shy of £1m-a-day last year.

Hohn collected $479m (£343m) in annual dividend payments from his The Children’s Investment (TCI) fund in the biggest ever personal payday in the UK after doubling profits at his Mayfair hedge fund, run from an office a couple of doors down from Louis Vuitton’s flagship store.

The payout – which works out at £940,000 for every calendar day of the year, and is nearly 11,000 times the median UK full-time salary – has shone a fresh spotlight on Hohn, a billionaire who goes to extraordinary lengths to protect his privacy after receiving regular death threats.

As well as making money and picking boardroom fights, Hohn, who was once chancellor Rishi Sunak’s boss at TCI, is one of the nation’s biggest philanthropists.

He has pumped more than £4bn into his personal children’s charity. And in recent years he has taken on a second cause: the climate crisis, promising to use his fund’s $30bn of investments to “force change on companies who refuse to take their environmental emissions seriously”.

Well known in the City and on Wall Street as one of the most aggressive activist investors, it came as little surprise to Hohn’s friends that he was not prepared to wait for governments to take action on climate change.

An Extinction Rebellion protest by the elderly
An Extinction Rebellion protest by the elderly in London 2019. Chris Hohn is the group’s biggest donor.Photograph: Richard Baker/Alamy

Instead he has pumped money into Extinction Rebellion (XR), the “respectful disruption” campaign that has staged high-profile sit-in protests around the world. When Hohn was revealed as XR’s single biggest donor, he said: “Humanity is aggressively destroying the world with climate change and there is an urgent need for us all to wake up to this fact.”

Hohn, who has only given a handful of tightly controlled media interviews throughout his career, pleaded with the high court judge overseeing his 2014 divorce from Jamie Cooper-Hohn to ban the media from the courtroom.

However the request was denied, giving the public a glimpse into the billionaire’s surprisingly modest lifestyle, his motivations for making so much money, and why he didn’t view his wife of 17 years as worthy of half the family fortune.

Although he was in a fight over a huge amount of money, Hohn said his life’s mission was to give money away. “My life is actually about charity,” he told the court. “I learned very early on you cannot take money with you. It does not bring you happiness.”

He said he lived a “very simple lifestyle”, avoids meat and practises yoga. On hearing the evidence, the judge noted that the couple lived a “Swatch lifestyle” not a “jet-set lifestyle”.

Hohn grew up in Addlestone, Surrey, the son of a Jamaican car mechanic and a legal secretary. He first decided to give money to charity, he has said, while working in the Philippines, where as a 20-year-old he saw children living on a rubbish dump.

“I considered being a doctor and working in a caring profession,” Hohn, 54, told the court. “[But] a dream or aspiration without resources is just that.” He compared his ambition to become a philanthropist to other young people who set their hearts on being able to “play for Chelsea or be a top QC”.

Hohn studied accounting and economics at Southampton University, where a tutor suggested he go on to study for a masters in business administration at Harvard. He took their advice, and graduated in the top 5% of his class.

It was at a Harvard dinner party that Hohn met Jamie Cooper, who was studying for a masters at the John F Kennedy School of government. They married soon after and took each other’s names officially, but only Jamie used both surnames. They have four children, including a set of triplets.

Hohn worked for the private equity firm Apax Partners, before moving to the Wall Street hedge fund Perry Capital. Perry’s partners then posted him back to London where he ran the UK division.

He struck out on his own in 2003 setting up his own $500m fund TCI, which quickly attracted investment from some of the world’s top foundations and endowments including the Carnegie Corporation of New York and the Massachusetts Institute of Technology.

Jamie Cooper-Hohn
Jamie Cooper-Hohn leaves the high court after a divorce hearing in 2014. It was one of the most high profile divorces in British legal history. Photograph: Reuters/Alamy

The fund appealed to charities and foundations because it was structured so that one-third of management fees would go directly to the Children’s Investment Fund Foundation, a charity set up by the couple and run by Cooper-Hohn.

In an interview with the New York Times to promote the newly launched charity in 2008, Cooper-Hohn dismissed suggestions it had been set up as ploy to soften Hohn’s image as an activist investor unafraid to fight the boards of companies he had invested in.

Werner Seifert, the former chief executive of the German stock exchange
Werner Seifert, the former chief executive of the German stock exchange, wrote a book about a boardroom battle with Chris Hohn called Invasion of the Locusts.Photograph: Martin Argles/The Guardian

In a new year card to family, Hohn once wrote he had had an “exceptionally exciting year overthrowing German CEOs”. One opponent – former Deutsche Börse boss Werner Seifert – was so angry after losing a boardroom battle with Hohn that he wrote a book about it entitled Invasion of the Locusts, where he described Hohn’s style as “poison”.

Hohn’s TCI was also instrumental in forcing Dutch bank ABN Amro into the arms of Royal Bank of Scotland in 2007 – a deal which just months later, when the banking crisis hit, was a key reason RBS had to be bailed out by the UK taxpayer.

Cooper-Hohn said the foundation “not about putting a warm and fuzzy face” on TCI. She said knowing that a share of the management fees went to the fund was “very much about keeping Chris motivated” to produce the highest returns possible.

Both TCI and the foundation flourished. The hedge fund now manages $30bn of investments and is regularly listed among the world’s best-performing funds. Last year’s mega payday was not that exceptional for Hohn. The previous year he was paid £200m, and accounts filed at Companies House for TCI Fund Management (UK) Limited, which is 100% owned by Hohn, show that it holds total shareholder funds of almost $2bn.

The charity holds almost $6bn of assets and gave away $386m in 2019, according to the latest available accounts. However, the foundation no longer collects one-third of TCI’s management fees, following the couple’s divorce. Instead, Hohn can give to the charity at his discretion.

The divorce reached the high court after Hohn refused to give Cooper-Hohn half of their assets, arguing that the extraordinary wealth he had generated constituted a special contribution to the marriage. He claimed she was only entitled to 25%.

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Her lawyer said the marriage was “what most marriages are: a partnership. How can it be possibly be fair that a couple who have agreed how to run their lives together for the wife to only receive a quarter of the assets?”

After weeks of arguments – which included Hohn calling Goldman Sachs bankers “idiots” and describing former Spain and Chelsea striker Fernando Torres as “worthless” – the judge awarded Cooper-Hohn 36% – or $530m – of her former husband’s fortune.

Cooper-Hohn later won another court battle forcing Hohn’s CIFF charity to pay £270m to a charity set up by his ex-wife.

Source: The Guardian

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