Listen to the deep-dive discussion – Chris Hohn’s 53 Billion Dollar Tollbooth Bet. (29:27 min)
“The most important thing is high barriers to entry. If you find a company that is going to be a good company long-term, then you should hold on to it because there’s a persistency of these barriers to entry.”
— Chris Hohn, interview with Nicolai Tangen, May 2025
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Nine Positions. $53.6 Billion. Zero Cash.
In February 2026, the 13F filings of TCI Fund Management reveal something extraordinary. Chris Hohn — the British fund manager who runs one of the most successful hedge funds of his generation — manages $53.6 billion in exactly nine positions. No hedges. No cash. Every dollar deployed.
His average holding period is eight years. His annual portfolio turnover is 11%. His top five positions account for 84% of the portfolio. This is extreme concentration — among the tightest in the hedge fund industry at this scale.
Here is the portfolio, as filed on December 31, 2025:
| # | Position | Value ($B) | Weight | Category |
| 1 | GE Aerospace | 14.6 | 27.3% | Physical monopoly |
| 2 | Visa | 9.7 | 18.1% | Information tollbooth |
| 3 | Microsoft | 8.1 | 15.1% | Hybrid |
| 4 | Moody’s | 6.8 | 12.7% | Information tollbooth |
| 5 | S&P Global | 6.2 | 11.5% | Information tollbooth |
| 6 | Alphabet | 2.7 | ~5% | Information tollbooth |
| 7 | CP Kansas City | 2.1 | ~4% | Physical monopoly |
| 8 | CN Rail | 1.6 | ~3% | Physical monopoly |
| 9 | Ferrovial | 1.1 | ~2% | Physical monopoly |
Two categories emerge. On one side, information tollbooths — Visa, Moody’s, S&P Global, Alphabet — representing 47% of the portfolio. On the other, physical monopolies — GE Aerospace, railways, Ferrovial, Microsoft — representing 53%. Both are excellent businesses with deep moats. But what matters is not what Hohn holds. It’s what he’s doing with it.
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The Freesurfer and the Cost of B
To understand the significance of Hohn’s moves, we need a framework. In The Infinite Investor, we decompose every business into two forces: A (the revenue generated by existing operations) and B (the incremental capital required to generate the next unit of revenue).
The quality of a business is determined by the relationship between these two forces. When B is zero — when growth costs nothing — the business compounds freely. Every incremental dollar of revenue falls directly into free cash flow. No new factory, no new fleet, no new patent. This is what we call a Free B: the rarest and most valuable condition in investing.
A business that has a Free B and rides a growing wave of demand without having to build that wave is what we call a Freesurfer.
Visa is the archetype. Visa doesn’t lend money, doesn’t hold accounts, doesn’t take credit risk. It operates a network that processes transactions between issuers and acquirers, collecting approximately 0.13% on each one. Global electronic payment volume grows 8–10% annually. Visa’s revenue grows 8–10% annually. Additional capital required to capture that growth: zero. The same network. More volume. More revenue. Automatically.
Contrast this with GE Aerospace. GE holds one side of the global jet engine duopoly with Pratt & Whitney — a moat as deep as any in the world. But developing a LEAP engine costs $15 billion and takes 15 years. The next engine will cost another $15 billion. The moat is absolute, but growth requires perpetual reinvestment of heavy capital. This is what we call an Accretion Monopoly — a monopoly that grows by accumulating physical capital.
Both are superb companies. But only the first is a Freesurfer. And this distinction produces a natural hierarchy:
| Tier | Type | B Cost | Examples |
| 1 | Freesurfer | Zero | Visa, Mastercard, S&P Global, Moody’s, MSCI |
| 2 | Hybrid | Moderate | Microsoft (Azure needs data centers), Alphabet (same logic) |
| 3 | Accretion Monopoly | High | GE Aerospace, CN Rail, CP Kansas City, ASML |
The thesis is simple: capital should migrate up the gradient. From Tier 3 to Tier 1. From atom to bit. From heavy capital to zero capital.
And that is exactly what Chris Hohn is doing.
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The Migration: Three Quarters, One Direction
13F filings tell a story when you read them in sequence. This is not a static snapshot. It’s a film in motion.
Q2 2025
Buys: Visa (+2.4 million shares), S&P Global (+730,000), Microsoft (+265,000), Moody’s (+84,000).
Sells: CN Rail (−3.9 million shares), CP Kansas City (−2.1 million), Alphabet (−1.8 million), GE Aerospace (−61,000).
Q3 2025
Massive buy: Visa (+47% of the position, adding nearly 9 million shares). Minor additions to Moody’s and S&P Global.
Sells: Alphabet (−41%), CN Rail (−18%), CP Kansas City (−6%), Microsoft (−6%).
Q4 2025
Buys: Moody’s and S&P Global both increased, doubling down on the credit ratings duopoly.
The pattern is unambiguous. Over three consecutive quarters, Hohn is systematically selling physical monopolies — Canadian railways, infrastructure — and buying information tollbooths. He’s selling good to buy better. He’s trimming Alphabet and Microsoft to concentrate on Visa. He’s moving capital up the gradient.
The critical context: Hohn operates at zero cash. Every purchase is an explicit arbitrage. To increase one position, he must reduce another. In a zero-cash portfolio, every dollar competes permanently with every other dollar. It is the purest conviction test that exists.
And the result of that test, repeated three times in nine months, is always the same: the capital moves up. From rails to tollbooths. From atom to bit. From Tier 3 to Tier 1.
The underlying logic is one of perpetual opportunity cost. In Hohn’s framework, every dollar deployed in a Tier 3 position — however excellent the business — is a dollar that is not compounding at the rate of a Tier 1. CN Rail is a magnificent monopoly. But every quarter that a dollar remains in CN Rail instead of Visa, the differential cost of B accrues against the holder. CN must reinvest billions to grow. Visa grows for free. Over a decade, that differential compounds into a chasm. Hohn is not selling bad businesses. He is eliminating the compounding penalty of owning good businesses when better ones are available.
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AND, Not OR: The Cooperative Duopoly
The most counterintuitive observation in Hohn’s portfolio is this: he simultaneously holds Moody’s at 12.7% and S&P Global at 11.5%. Combined: 24.2% of $53.6 billion. Thirteen billion dollars in what appears, at first glance, to be two versions of the same company.
Why?
Because Moody’s and S&P Global are not the same company. They share a segment — credit ratings — where they form a duopoly. But beyond that segment, they diverge completely.
S&P Global is a conglomerate of four information tollbooths: credit ratings, indices (the S&P 500 and thousands of others, on which trillions of dollars of passive assets are benchmarked), financial data (Market Intelligence), and Platts (the global benchmark for commodity prices). Four Freesurfers in one ticker.
Moody’s is more concentrated: Moody’s Investors Service (ratings) and Moody’s Analytics (credit risk, compliance, KYC). Everything orbits a single axis — global credit.
But the real insight is in the structure of the tollbooth itself.
When a corporation issues $500 million in bonds, it pays approximately $500,000 to S&P Global AND approximately $500,000 to Moody’s. Not or. AND. Institutional investors demand two ratings. Regulators require it. Every debt issuance pays both agencies. This is a cooperative tollbooth, not a competitive one.
Increasing the position in one does not cannibalize the other. When global debt issuance volume rises, both collect. When it falls, both suffer — but the toll remains mandatory.
It’s like owning both rails of a railroad. The train cannot run on just one.
In Freesurfer terms, this is the purest case imaginable. Two companies jointly levying a mandatory tax on global debt — with zero capital, zero competition between them, and no regulatory alternative. As long as the world issues debt — which is structurally inevitable in a credit-based economy — Hohn collects from both sides.
The architectural distinction between Moody’s and S&P Global — and the different species of Freesurfer each represents — is explored fully in “The Double Swell Freesurfer” on this site.
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Zero Cash and the Infinite Option
Hohn’s portfolio runs at zero liquidity. This is not an oversight. It is a statement — and it demands explanation, because it appears to contradict one of the most powerful concepts in long-term investing.
In The Infinite Investor, we argue that cash has a specific and powerful function: it is an Infinite Option — the right to buy at the exact moment when the market offers a gift. A confirmed Freesurfer at a historically low valuation. A tollbooth on sale. The Infinite Option is the ultimate weapon of the patient investor. Buffett holds $325 billion in cash at Berkshire Hathaway precisely for this reason.
Hohn does the opposite. Zero cash. Every dollar at work.
This is not a rejection of the Infinite Option. It is the conclusion that the Infinite Option has a price — and that the price, for Hohn, is too high.
Consider the arithmetic. A dollar in cash compounds at roughly 4–5% — the risk-free rate. A dollar in a Freesurfer compounds at 12–18%, with a B that is free and an execution risk that is near zero. The difference — eight to thirteen points per year — is the premium of the option. On a single year, the premium is tolerable. Over a decade, it is a chasm. The right to buy a Freesurfer during a future crash does not come free. It costs the compounding that the dollar forfeits while it waits.
Munger articulated the principle that governs Hohn’s logic: the cost of an investment is always the next-best alternative forgone. For Hohn, the next-best alternative to holding cash is not a generic stock. It is a Freesurfer — a business that compounds at a high rate with no capital required and no execution risk to monitor. Against that alternative, cash is not a strategic reserve. It is a permanent leak in the compounding engine.
But Hohn’s rejection of cash goes further. He does not merely avoid cash. He treats his lower-tier holdings as the functional equivalent of a reserve. His Tier 3 positions — the Canadian railways, the infrastructure — are not dead capital. They are compounding at 8–12% while they wait to be recycled into something better. They are, in effect, cash that compounds: a reserve that earns a return while preserving the option to be liquidated and redeployed when a Freesurfer reaches an attractive price. When Visa dropped to historically compressed multiples, Hohn did not need a cash reserve. He sold CN Rail. The rail was his cash — cash that had been compounding at the rate of a monopoly instead of the rate of a Treasury bill.
The implicit hierarchy is revealing. For Hohn, there are three states a dollar can occupy, from worst to best: (1) cash, compounding at the risk-free rate — the most expensive state, because the opportunity cost is highest; (2) a Tier 3 Accretion Monopoly, compounding well but burdened by the cost of B — a superior reserve that also serves as a source of funds; (3) a Tier 1 Freesurfer, compounding at the maximum rate with zero incremental capital — the final destination of every dollar. Cash is not the second-best option. It is the worst. A railway is better cash than cash, because it compounds faster and can be sold when the moment arrives.
A word of caution is essential. This logic is elegant in a rising market. But market risk is never eliminated. In 2008, Berkshire Hathaway fell 50%. CN Rail fell over 40%. The “cash that compounds” still correlates with the market when the market breaks. Hohn’s zero-cash strategy accepts this risk deliberately. His implicit bet is that the cumulative cost of holding real cash — years of forgone Freesurfer compounding — exceeds the periodic cost of riding a drawdown in positions whose underlying tollbooths never stop collecting. Visa’s transaction volume may dip 5% in a recession. It does not dip 30%. The toll continues. The wave resumes. The compounding, interrupted briefly in price, was never interrupted in substance.
Buffett’s approach is structurally different, not philosophically opposed. Buffett generates cash continuously — insurance premiums, subsidiary earnings. Cash accumulates whether he wants it to or not. And when he deploys, he must deploy $10–20 billion at once, which requires the kind of dislocation that occurs once a decade. The Infinite Option is structurally free for Buffett — the cash arrives anyway — and structurally necessary — he cannot deploy incrementally. Hohn can. Hohn adjusts quarter by quarter: 2.4 million shares of Visa here, 730,000 shares of S&P Global there. His deployment is continuous, not episodic. He does not need the patience of armed cash because he has the flexibility of perpetual recycling.
The lesson is the same in both cases: when the fat pitch arrives — a confirmed Freesurfer trading 30% below its historical valuation — capital must move. Buffett does it by deploying his reserve. Hohn does it by selling good to buy better. The mechanics differ. The discipline is identical. And the ultimate logic is Munger’s: every dollar has an opportunity cost, and the measure of an investor’s discipline is the ruthlessness with which that cost is minimized. For Hohn, the minimum is zero idle capital. Every dollar compounds in the best tollbooth available. Always.
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Sizing: Conviction Measured in Billions
Hohn’s position sizing is an education in itself. Nine positions. The top five represent 84% of the portfolio. This is extreme concentration.
But the concentration is not random. It reveals a logic of conviction weighted by quality.
The largest bet, GE Aerospace (27%), is his most irreplaceable Accretion Monopoly — the global jet engine duopoly has a near-absolute barrier to entry. But the second largest, Visa (18%), is a pure Freesurfer. And if you combine both sides of the credit ratings duopoly — Moody’s and S&P Global — you get 24.2% of the portfolio. The largest effective position is an information tollbooth.
When Hohn sizes, he isn’t just looking at the quality of the moat. He’s looking at the cost of B. GE sits at 27% because the moat is absolute and the position was accumulated at attractive prices. But the direction of marginal capital — the next dollar, the one Hohn is actively deploying — systematically goes to the Freesurfers. He doesn’t trim GE to buy more GE. He trims rails to build Visa, Moody’s, and S&P Global.
Sizing reveals conviction more honestly than words. And Hohn’s conviction, measured in billions, points in one direction: toward the top of the quality gradient, where B is zero.
The four criteria that calibrate conviction-weighted sizing — moat width, ROIC durability, reinvestment runway, and specific risk — are developed fully in “Position Sizing: The Final Act of Conviction” on this site.
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The Prison of Size
There is a Freesurfer that Hohn does not own: MSCI.
MSCI is a remarkably pure tollbooth on global indexing. Two segments only — indices and analytics — with operating margins among the highest in the sector. Every ETF, every passive fund, every institutional allocation benchmarked to an MSCI index pays a royalty. It’s the same model as S&P Dow Jones Indices — but more concentrated. Two segments instead of four. A purer Freesurfer.
Hohn doesn’t buy it. Not because he doesn’t see it. Because he can’t.
MSCI has a market capitalization of approximately $45 billion. To take a meaningful position — say 3% of his fund, or $1.6 billion — Hohn would need to acquire 3.5% of all outstanding MSCI shares. Both on entry and exit, this creates a major liquidity problem. Furthermore, S&P Global owns S&P Dow Jones Indices — Hohn already has his index exposure, bundled in a more liquid ticker.
This is the prison of size. At $53.6 billion, Hohn is constrained to nine positions because each position must absorb billions. Mid-cap names, asymmetric opportunities, smaller Freesurfers — all of it is off-limits.
“Give me $1 million and I guarantee you 50% a year. At $300 billion it’s impossible.”
— Warren Buffett
The investor managing $10 million, or $1 million, or $100,000 has a structural advantage that Hohn can never replicate. Size is a moat, but in the other direction: being small is the moat. You can own Hohn’s nine positions plus MSCI, plus high-convexity positions in names Hohn will never touch. You have Hohn’s framework with the flexibility Hohn doesn’t have.
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The Gradient Revealed
What Chris Hohn’s portfolio reveals, in real time, with $53.6 billion, is a hierarchy that reasoning alone can derive but empirical evidence makes incontestable.
Even at the summit of quality — in a portfolio where every position is a monopoly or near-monopoly — a gradient exists. And capital always migrates up the gradient. Canadian railways are excellent. Visa is better. GE Aerospace is irreplaceable. The Moody’s–S&P Global duopoly is more irreplaceable still, because it costs nothing.
The discriminant is not the moat. It’s not the barrier to entry. It’s the cost of B. GE has a moat as deep as Visa’s. But GE must reinvest $15 billion per cycle. Visa reinvests zero. In the universe of long-term compounding, this difference is determinative. It is the only variable that separates the very good from the exceptional.
Hohn doesn’t theorize. He acts. He sells good to buy better. And every quarter, the 13F tells the same story: capital moves up. From atom to bit. From heavy capital to zero capital. Toward the top of the gradient.
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The capital always migrates up the gradient. Not because physical monopolies are bad — they are excellent. But because in the universe of compounding, the cost of B is the only variable that separates the very good from the exceptional.
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This post is part of the wealth architecture described in The Infinite Investor by Jocelyn Dubé, available at averagingup.com. For the complete architecture — including the Freesurfer taxonomy, the cost of B, the Infinite Option, the Bucket system, and position sizing — see the book.
Data source: TCI Fund Management 13F filings (Q2, Q3, Q4 2025) as reported to the SEC. 13F filings only disclose US-listed securities. TCI’s total AUM includes non-US holdings (such as Safran and Aena) that do not appear in these filings.
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Related posts on this site:
- The Freesurfer: Growth That Costs Nothing — The concept that started it all: the A × B formula, the Free B, and the five businesses that compound without paying for growth.
- The Double Swell Freesurfer — The complete taxonomy of Freesurfer species: Classic, Resilient, Coupled, and Hybrid. How AI creates a second wave on the same reef.
- Position Sizing: The Final Act of Conviction — Why the weight of a position is the decision that validates all the others, and the four criteria that calibrate every Compounder.
- The Volatility Tax and How to Defeat It — The mathematical foundation of Skewness and Ergodicity.
- Beyond the Average: Mastering the Hidden Mathematics of Compounding — The four-category system and the framework for classifying holdings by function.
- Growth and Multiple Expansion: the Twin Engines of 100-Baggers — Why durable Compounders deserve large positions.
- Great Businesses Compound Their Earnings at High Rates — The selection criteria that identify businesses worth sizing up.
- The Way to the Mountain Guide — When the portfolio becomes the position.