Hedge fund firm TCI's profits surge

By Laurence Fletcher

LONDON (Reuters) - Activist hedge fund firm TCI, which launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank's sale, has seen profits surge 73 percent but warned this year will be tougher.

The Children's Investment Fund Management (UK) LLP reported profit available for sharing among members of 555.9 million pounds for the year to end-August 2008, up from 321.0 million pounds a year before.

The firm paid 484.3 million pounds to its charity CIFF (The Children's Investment Fund Foundation), up from 271.4 million pounds a year before.

Founder and controlling partner Chris Hohn saw his pay more than double to 1.7 million pounds, while remuneration to other members fell to 44.3 million pounds from 48.9 million pounds.

TCI's financial year to August only partly coincides with what was a difficult 2008 for hedge funds.

The average hedge fund lost around 19 percent in 2008, while TCI fell around 40 percent, although many hedge funds' losses were concentrated in September, October and November when the market was particularly volatile.

Hohn said: "Current market conditions will have a material impact on the income stream of the partnership over the following 12 months".

In 2007, TCI, which buys big positions in firms and presses for change, scored a notable success in its criticism of ABN AMRO's "terrible shareholder return". ABN was later sold to a consortium led by Royal Bank of Scotland (RBS.L: Quote, Profile, Research).