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đź—ž Chris Hohn: Building the "Forever" Portfolio
How Chris Hohn finds the most durable companies in the world.
Braden Dennis & Ryan Henderson
December 07, 2025
Written by: Ryan Henderson & Braden Dennis
Happy Sunday! đź‘‹
This week we’re taking a look at Chris Hohn and how he’s built a portfolio of the world’s most durable companies.
Let’s dive in!
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Featured Story
Chris Hohn: Building the Forever Portfolio
Chris Hohn is one of the best investors of the 21st century.
His fund — The Children’s Investment Fund (TCI) — has generated a whopping 18% annualized return net of fees since its 2003 inception, and is now home to $70 billion in assets under management.
TCI’s Investment Strategy
While TCI’s returns are extraordinary, their strategy is surprisingly simple.
“TCI seeks to invest in high quality companies with sustainable competitive advantages.”
You can probably find a similar quote to that on just about every long-term investment fund’s website, so what makes Hohn unique?
Hohn, and TCI by association, adheres to one of the tightest “quality” frameworks I’ve ever seen. His strict parameters over what qualifies as “high quality” have helped him build a portfolio consisting primarily of monopolies and duopolies with remarkable durability.
TCI strives to own companies “forever”, and in order to do that, they have to be certain about a company’s competitive advantages.
Hohn has publicly stated that his investment team spends the vast majority of their research time analyzing whether or not a company possesses barriers to entry.
In his view, this matters far more than a stock’s valuation.
“We don't even look at that (valuation) until we get comfortable that the barriers are so strong it will be around.”
“Here’s the thing about multiples… They matter less than the growth when you look at it over a longer period”
To find companies with massive barriers to entry, TCI spends most of its time on the following two areas:
1. Competition Risk
In an interview earlier this year, Chris Hohn said: “the one important thing that I've learned in my time in investing is that investors underestimate the forces of competition”.
Competition kills profits. It’s an unavoidable truth, and there are endless examples throughout history to prove it.
So to avoid competitive threats, Hohn primarily invests in businesses with physical assets that simply cannot be replaced.
Case Study: Aena S.M.E
Aena is a global airport operator based in Spain. Most notably, they operate the Barcelona and Madrid airports.
Airports are natural monopolies. Even if someone had the money to build a commercial airport in Barcelona or Madrid (and it would be very expensive), they likely wouldn’t receive the regulatory clearance to operate one. That means most passengers have no choice but to use Aena’s properties.
“That's something forgotten in economic textbooks as a metric (replacement value), but an example is, maybe 10 years ago, 9 years ago, the Spanish government approached us about taking an anchor position in an IPO of their airport, Aena. Airport was basically brand new, huge undercapacity, and 75% of the value was in unregulated shops and car parks and--complete monopoly, unregulated, and huge growth potential. And they sold it at a 15% free cash flow yield. And what we could see is that you could never replace these assets -- Madrid airport and Barcelona airport. They’re irreplaceable.”
2. Substitution Risk
Beyond searching for competitively advantaged companies, Hohn also spends time focusing on industry durability. In other words, he wants companies that operate in an industry that won’t be up-ended by new advancements in technology.
In his words: “in certain industries, your risk of being wrong is higher”.
Case Study: General Electric
One industry that Hohn believes will be durable is air travel. He has said that he feels confident the world will still fly airplanes in 30 years. That’s one of the primary reasons why his largest position is General Electric.
In 2023 and 2024, General Electric spun off both its healthcare business (now GE Healthcare) and power/renewable energy business (now GE Vernova). These spin-offs left just the aerospace subsidiary as the remainder, and as it turns out, it’s a gem of a business.
“Another space we like, as an example, is aerospace. Things like aircraft engines and manufacturers like GE Aerospace and Safran. And we like that space because the barriers to entry are extremely high, in terms of intellectual property -- it's so complicated to make this product that there have been no new entrants for 50 years. So no new entrants is a sign of the barriers to entry.”
