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Last Updated: Wednesday, 28 June 2006, 05:25 GMT 06:25 UK
Hedge fund 'UK's biggest donor'
Children in Kenya
The charity aims to tackle child poverty in the developing world
A hedge fund has emerged as one of the UK's most generous philanthropists, says BBC business editor Robert Peston.

Accounts just filed show the fund - The Children's Investment Fund (TCI) - gave 50.4m to its charitable arm in the year to 31 August, 2005.

The charity connected to the fund, the Children's Investment Fund Foundation, works to alleviate child poverty in the developing world.

The hedge fund hands over up to 1% of its assets to the charity.

At present, the foundation is endowed with 63m, and TCI has put a further 33m into another charity registered in the US.

'Improving lives'

The hedge fund, one of the most successful in Europe, was founded by Chris Hohn, a 39-year-old graduate of Southampton University.

It is said that Mr Hohn set up the formulaic link that half of TCI's annual assets must go to the charity in order to motivate himself.

According to market sources, TCI has 3.8bn of funds under its management.

That would imply that in the current year it will give at least another 20m and maybe as much as 40m to the charity.

The charity itself describes its work as "aiming to demonstrably improve the lives of children living in poverty in developing countries".

It works with children who have been orphaned by Aids - or are at risk of being orphaned - in Kenya, Uganda, Malawi, Ethiopia and India.

Business approach

In Africa, it is further helping with agriculture, training mentors, and supporting educational initiatives.

The charity is said to take a very business-like approach to the projects it backs, looking for proof of positive benefits for the children it tries to help and projects that can be "scaled up" to help thousands.

TCI's main challenger for the title of the UK's most generous philanthropist is Sir Tom Hunter, the retail entrepreneur, who is said to have invested 100m in charitable causes over the past decade.

The revelation of TCI's philanthropy comes after billionaire US investor Warren Buffett has said he would donate about $37bn (20bn) to Bill Gates' charitable foundation.

Hedge funds are private investment funds which invest in a variety of different assets on behalf of their clients, usually wealthy individuals.

In many, but not all cases, this can involve using high-risk financial strategies.

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