Hedge fund TCI cuts stake in Royal Mail Chris Hohn, the boss of TCI, has cut his holding in Royal Mail three months after building it, apparently confirming Vince Cable's fears that hedge funds would not be long-term holders of the company. In a regulatory statement, TCI said it had reduced its stake in Royal Mail from 5.8pc to 4.58pc. The sale, which cuts the value of TCI's investment by £74m, suggests that the hedge fund believes that Royal Mail shares are at the top of their valuation. Shares in the newly privatised delivery company closed last night at 600p, near its record high and more than 80pc above its float price of 330p. Labour ministers have said the Government "botched" the sale of Royal Mail and short-changed the taxpayer of billions of pounds by selling it too cheaply. TCI emerged as Royal Mail's biggest shareholder with a 5.8pc stake on October 22, just a week after the shares started trading unconditionally on the stockmarket. The declaration surprised the market because the Business Secretary, who has often criticised hedge funds for being short term investors, repeatedly insisted that Royal Mail would be sold to "long-term, blue chip" institutional investors. Some 90pc of the institutional offering was allocated to institutions, including Fidelity, Standard Life, Threadneedle and BlackRock. Insiders said Mr Cable had to be persuaded to allocate 10pc of the offering to hedge funds to ensure that the stock had enough liquidity when it listed. All investors were allocated small portions of stock which TCI managed to snap up in a meticulous share buying exercise. There was speculation that TCI might use its stake to force faster and more dramatic change at the company. But in an interview with The Telegraph Donald Brydon, chairman of Royal Mail, said that management had not had "any of that pressure at all." He said Mr Hohn "understands the business. At a conference in London last year, when Mr Hohn was asked about the investment, he said: "Governments are just about the worst owner of a company you could find. They mismanage them in every way possible. When those companies move from government ownership to privately-owned, these companies transform. Mr Hohn, who is also Britain's biggest philanthropist having given away more than £1bn in five years, set up TCI in 2003. The fund was structured so that a proportion of its profits were given directly to CIFF, a children's foundation run by Mr Hohn's former wife, Jamie Cooper-Hohn. Last year TCI's flagship $7.9bn Master Fund generated a record 47pc return. TCI declined to comment.