Sir Christopher Hohn, co-founder of the largest hedge fund in the United Kingdom and Europe, continues to pull the strings in the shadows of his investees on the Spanish stock market. The latest movement was registered with Aena, the manager of airports such as Madrid-Barajas, Barcelona-El Prat, Málaga-Pablo Picasso or Palma-Son Sant Joan, among others.
The Children Investment Fund (TCI) has notified the CNMV of the novation of its financial derivative contracts at Aena after the previous one expired on November 23. The renewed ‘equity swap’ (via CFDs) expire in 2025 and are divided into three tranches, as stated in the supervisor’s form.
The first of them expires on February 17 and is equivalent to 910,000 shares (0.6% of Aena’s capital). The second expires on May 30, 2025 and affects 3.9 million securities (2.61% of the company). The third expires on November 27, 2025 and is based on 295,000 shares, 0.19% of the Spanish group.
3.4% of Hohn’s stake in Aena is in these derivatives that are owned by the Cayman Islands-based hedge fund TCI Master Fund and represent the majority of his total 6.2% position that he declares to the CNMV.
The rest of the investment that the British investor has left in Aena are cash shares and only amount to 2.83% of Aena’s capital. They are distributed between the British Ciff Capital UK LP (0.7%) and the European TCI Luxembourg SARL (2.07%)
CFDs are instruments that are settled by differences between the stock market price and the reference price of the contract. They allow you to have exposure to the stock but without having it, with much less capital invested and to operate both up and down, that is, benefiting from the rises or falls of Aena on the stock market. This information is not public because they are bilateral contracts between TCI and its broker. Furthermore, the notification to the CNMV does not detail the type of operation of this investor.
Ten years in the capital of Aena
In this way, TCI will celebrate a decade as Aena’s reference investor, despite the fact that it has sold a good part of its position, multiplying what it invested. Hohn joined as a capital partner in Aena’s IPO in 2015 by the Government of Mariano Rajoy, which privatized the airport manager.
It did so ahead of other interested groups such as Ferrovial (Del Pino) or Corporación Financiera Alba (March), which were also on the shortlist of investors who expressed their interest in supporting one of the largest share placements in the Spanish stock market. with nearly 4,500 million euros collected for the State, which divested itself of 49% of Aena’s shares.
The strategy of operating in cash and with derivatives by TCI (Hohn) began in December 2015, a few months after Aena’s IPO. However, the massive use of financial derivatives did not become visible through the regulator until early 2019, when TCI accelerated its process of divesting the company.
It was four years ago when he began to build significant stakes in other Ibex 35 companies with the enormous capital gains achieved with Aena. His business has been successful. It is estimated that the British fund has been able to more than triple its initial investment between what it has sold and what it has left. It disposed of securities of the airport company on the stock market between 2018 and 2019 worth 930 million euros, almost the same as it committed in the 2015 IPO.
In addition, TCI has collected more than 300 million in dividends between 2015 and 2023, taking into account that not even in 2020, 2021 and 2022 was any payment paid by Aena. To these figures we must add the 130 million that entered between 2020 and 2021 with new sales of shares on the stock market. Finally, the value of 2.8% (660 million) worth its direct participation and 3.4% of financial derivatives.
TCI has become a reference shareholder in Ferrovial – which it has supported in its process of moving to the Netherlands to later list in the US – and Cellnex, which has helped, at the initiative of TCI, a change of its management leadership with the arrival by Marco Patuano. The investment in these two companies exceeded 4,000 million with percentages of 8% and 9.4%, respectively.