The Children's Investment Fund has trimmed its controversial stake in Britain's Royal Mail.
The activist hedge fund has reduced its ownership in the postal system to 4.58% from 5.8%. Royal Mail shares have soared more than 80% since their initial public offering in October, and closed yesterday near a record high.
TCI emerged as the Royal Mail's largest shareholder following the float. That, and the stock's quick surge from its offering price, led to heated criticism of the IPO as too cheap.
There were also fears that an activist like TCI founder Christopher Hohn would lead to intense pressure on the Royal Mail to cut costs and boost profit. But that hasn't been the case.
"He's not the terror people say he is," Royal Mail Chairman Donald Brydon told The Telegraph. "The assumption is that he's going to do to Royal Mail what he did to Deutsche Börse," where TCI helped sink a proposed merger with the London Stock Exchange and forced out its two top executives. "But if you look at his record, that's not what he does. He's not a locust, or whatever the Germans said. He's very thoughtful about how you maximize returns from different businesses."
"We've certainly not had any of that pressure at all. I think you should take at face value what he said, which is that the state is very bad at running companies and so when they get sold there is opportunity, as long as you can extract the value properly."
TCI returned 47% last year, thanks in part to its Royal Mail investment.