TCI Profit Plummets 80%

Nov 30 2010 | 12:51pm ET

It has been clear for some time that the last few years have been hard on The Children's Investment Fund Management. Now, it is clear just how hard.

The London-based activist hedge fund reported pre-tax profits of just £101 million for the 18 months ended Feb. 28. That’s more than £450 million less than it took in during the 12 months preceding that period, ending Aug. 31, 2008—just as the hedge fund industry, including TCI, began its nose-dive.

TCI lost 43% in 2008, wiping out any performance fees and putting a big dent in its management fees as assets under management fell from US$10 billion to US$6 billion earlier this year.

TCI did not say why it changed its accounting date from August to February; under British law, companies do not have to.

The hedge fund's fee income has fallen precipitously over the past several years. The charity from which it gets its name reported this summer that it had received just £19 million from the hedge fund in 2009, down from £486 million in 2008. TCI gives a set portion of its fee income to the charity every year.

TCI has also been hit by a raft of high-level departures in recent years, including the exits of founding partners Patrick Degorce and Snehal Amin and former Asia chief John Ho.


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