Children’s Investment Fund Sells Mastercard, Buys Rival Visa

Date: Thursday, February 19, 2009
Author: Christopher Condon, Bloomberg.com

Children’s Investment Fund Management UK LLP, the London-based hedge fund founded by Christopher Cooper-Hohn, sold off its shares in Mastercard Inc. and added shares of rival credit-card network Visa Inc. in the fourth quarter.

Children’s sold its 5.95 million shares, valued at $963 million on Sept. 30, of Mastercard, based in Purchase, New York. The fund bought 4.7 million shares in San Francisco-based Visa, increasing the value of its stake to $589 million as of Dec. 31, according to a filing today with the U.S. Securities and Exchange Commission.

Children’s fell 43 percent in 2008, its first full-year loss. Cooper-Hohn told a U.K. House of Commons committee Jan. 27 his fund held about $9.5 billion. He held $1.85 billion in five U.S. stocks as of Dec. 31, according to data compiled by Bloomberg. Hedge funds had had their worst year in two decades, dropping 18 percent in 2008 on average, according to data compiled by Chicago-based Hedge Fund Research Inc.

Cooper-Hohn’s fund kept its stake in CSX Corp. of 17.8 million shares, or about 4.5 percent of the Jacksonville, Florida-based railroad. Children’s lost about $450 million as stock plunged 41 percent in the quarter.

Cooper-Hohn recently informed CSX he wouldn’t seek re- election as a member of the company’s board of directors at the annual shareholder meeting scheduled for May 6, according to a Feb. 11 filing with the SEC. Cooper-Hohn fought for more than a year to win a seat on the board.

The fund cut its holding in Omaha-based Union Pacific Corp. by about 63 percent to 8.8 million shares.

The fund sold most of its holding, 1.96 million shares, in Chicago-based derivatives exchange CME Group Inc.

Children’s Investment Fund Management contributes a portion of its profits to the Children’s Investment Fund Foundation in the U.K., also founded by Cooper-Hohn, the son of a Jamaican car mechanic. Cooper-Hohn was the most generous donor to charity in the U.K. in 2008, according to the Sunday Times newspaper.

Money managers who oversee more than $100 million of equities or more must file, within 45 days of the end of each quarter, a Form 13F with the SEC that lists their U.S. exchange- traded stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.

To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net