$18.9bn! This British billionaire just smashed the S&P 500 with these stocks

Many fund managers have struggled to beat the red-hot S&P 500 lately. Nonetheless, Sir Chris Hohn handily outperformed the index in 2025, with a reported web return of greater than 27% versus the S&P 500’s 18% complete return.

Extremely, the British billionaire earned an estimated $18.9bn in web features for these invested in his TCI Fund Administration. This was the largest single-year achieve on report for a hedge fund!

With an annualised return of roughly 18% since 2004, TCI is now fifth on the record of probably the most worthwhile hedge funds of all time. 

How has Hohn achieved this? And what can traders be taught from it? 

Large-moat technique

The cash supervisor’s technique is notoriously concentrated – usually simply 9 or 10 shares – and he seems to be particularly for pure monopolies. These are companies with extraordinarily sturdy aggressive benefits (what Warren Buffett would name deep moats). 

TCI’s largest holding, engine maker GE Aerospace, surged roughly 85% in 2025. Positive aspects additionally got here from longstanding positions in Microsoft, Visa, Moody’s, and infrastructure agency Ferrovial.

In the meantime, Google guardian Alphabet jumped 65%! 

What stands out to me is that these companies function in industries the place the boundaries to entry are very excessive. For instance, as soon as an airline buys a GE engine, it’s basically locked in for 20+ years of high-margin servicing and components. 

In the meantime, Microsoft’s annual capital expenditure is presently $140bn-$150bn. That is the entry value to play within the hyperscale cloud computing sandbox, limiting competitors to a small handful of gamers. 

Visa is one-half of a worldwide duopoly in funds, whereas holdings Canadian Pacific Kansas Metropolis and Canadian Nationwide Railway function irreplaceable rail networks.

Deal with the long run

So, what can traders be taught from this? One takeaway might be to deal with hard-to-replace firms in industries with excessive boundaries to entry.

Crucially, Hohn is a long-term investor. TCI’s common holding interval is round eight years, with some positions held for over 13 years. So he lets high-conviction winners run as giant positions.

Wealth is constructed by discovering high-quality firms buying and selling at truthful costs, then letting compounding work its magic over years and a long time. 

A inventory to think about

A smaller holding that additionally did nicely for TCI final yr was Airbus (ENXT:AIR). Shares of the airplane maker rose about 40%.

Airbus has lots of the qualities already mentioned. Within the wide-body and narrow-body plane market, it operates a worldwide duopoly with Boeing. It’s practically not possible for a brand new competitor to succeed because of the excessive capital necessities and technical complexity.

Hohn likes companies which have important merchandise with long-term, predictable demand. Airbus definitely ticks this field, having ended 2025 with a report backlog of about 8,754 plane ready to be delivered. 

That’s a 10-year await sure fashions! 

That stated, manufacturing bottlenecks are a continuing problem. Final yr, the airplane producer lowered its goal to 790 jets from round 820. So provide chain issues are a key threat.

However, an extra 1.5bn persons are anticipated to affix the center lessons globally by 2044, in line with Airbus. And this inventory is arguably the final word play on international journey progress.

Airbus is buying and selling at 21 instances subsequent yr’s forecast earnings, which strikes me as cheap for a deep-moat firm like this. As such, I reckon it’s value contemplating for long-term traders.