Many fund managers have struggled to beat the heat S&P500 in recent years. However, in 2025, Sir Chris Hohn easily outperformed the index, posting a net return of over 27% compared to the S&P 500 Index’s total return of 18%.

Incredibly, the British billionaire earned an estimated $18.9 billion net profits for people invested in his management of TCI funds. It was the largest single-year profit in the history of a hedge fund!

With an annual return of approximately 18% since 2004, TCI currently ranks fifth on the list of highest-grossing hedge funds of all time.

How did Hohn do it? And what can investors learn from this?

Wide moat strategy

The money manager’s strategy is notoriously concentrated – often just nine or 10 stocks – and he especially looks for natural monopolies. These are businesses with extremely sturdy competitive advantages (what Warren Buffett would call deep moats).

TCI’s largest holding, engine manufacturer GE Aerospaceincreased by about 85% in 2025. Gains also came from long-term positions in Microsoft, Visa, Moodyand infrastructure company Ferrovial.

Meanwhile, Google’s parent Alphabet jumped by 65%!

What stands out to me is that these companies operate in industries where entry barriers are very high. For example, when an airline purchases a GE engine, it is essentially committed to more than 20 years of high-margin service and parts.

Meanwhile, Microsoft’s annual capital expenditure currently stands at $140-150 billion. This is the starting price for playing in the hyperscale cloud computing sandbox, limiting competition to a compact handful of players.

Visa is half of the global payments duopoly, and the holding companies Canadian Pacific City, Kansas City AND Canadian National Railway they operate irreplaceable railway networks.

Focus on the long term

So what can investors learn from this? One conclusion may be to focus on companies that are arduous to replace in industries with high entry barriers.

Most importantly, Hohn is a long-term investor. The average retention period for a TCI company is approximately eight years, with some positions held for more than 13 years. Therefore, it allows winners who have high conviction to occupy high positions.

Wealth is built by finding quality companies that trade at fair prices and then letting it work its magic over the years and decades.

Stocks worth considering

A smaller holding that also did well against TCI last year was: Airbus (ENXT:AIR). Shares of the planemaker rose about 40%.

Airbus has many features that we have already discussed. It operates within a global duopoly on the wide-body and narrow-body aircraft market Boeing. The success of a novel competitor is almost impossible due to extreme capital requirements and technical complexity.

Hohn likes companies that have imperative products that have long-term and predictable demand. Airbus certainly ticks the box, ending 2025 with a record backlog of approximately 8,754 aircraft awaiting delivery.

Some models have to wait up to 10 years!

That said, production bottlenecks are a constant challenge. Last year, the planemaker lowered its target to 790 from about 820. So the key risk is supply chain problems.

Nevertheless, additional 1.5 billion According to Airbus, by 2044 people around the world will join the middle class. These actions are probably the biggest contributor to global travel growth.

Airbus is trading at 21 times earnings for next year, which seems reasonable to me for a company that is in a deep moat. Therefore, I believe it is worth considering this option for long-term investors.