Jacob Rees-Mogg exit from Somerset set to be inconsequential

Contribution to the industry described as ‘nothing, nada, zilch’ as he focuses on politics

Jacob Rees-Mogg’s contribution to the investment industry, as he steps back from Somerset Capital Management to take up a role in cabinet, has been described as minimal, while his track record as a fund manager “didn’t shoot the lights out”.

Somerset Capital Management issued a statement on Thursday hot on the news the Conservative Party member had been appointed to Boris Johnson’s cabinet as the leader of the House of Commons.

Somerset partner Oliver Crawley said the former Tory backbencher had been integral to the firm’s early success and over the years had helped the business grow into one of the UK’s leading emerging market boutiques.

“We wish him well as he now steps down immediately from his part time role in accordance with the Ministerial Code,” said Oliver Crawley.

‘Nothing, nada, zilch’

However, most commentators thought Rees-Mogg’s exit would have minimal effect on Somerset Capital.

“About time he stepped down,” said Fundscape CEO Bella Caridade-Ferreira. “I don’t believe he was a good fund manager and his contribution to the industry is nothing, nada, zilch.”

Willis Owen head of personal investing described Rees-Mogg’s contribution to the industry as “under the radar especially when you compare it to his political profile”. Somerset Capital’s established presence within emerging markets would be Rees-Mogg’s legacy, although his exit would have little impact on the firm, Lowcock said.

Gbi2 managing director Graham Bentley says Rees-Mogg “didn’t shoot the lights out” as a fund manager at Lloyd George and struggled to beat the benchmark, although Bentley notes he had a “cautious, value driven approach”.

Bentley said Somerset’s success was down to Rees-Mogg’s team, given his lack of involvement in day to day management since becoming an MP in 2010. “His stepping down isn’t going to be significant, other than his name will add less kudos to the company obviously.”

A target of ‘hysterical headlines’

However, not everyone thought Rees-Mogg’s association with the firm had been positive.

Tilney managing director Jason Hollands said his political profile has probably hurt Somerset’s image in recent years.

“His association with Somerset Capital probably hasn’t helped the business in recent years, which has stories about run of the mill activities, like the Somerset Capital setting up a version of a fund in Dublin to satisfy overseas clients, blown out of all proportion into near hysterical headlines accusing Jacob Rees-Mogg of somehow deserting the UK,” he said.

Hollands noted Rees-Mogg’s “long career as fund manager” and said he should be commended for attracting a very capable team to run the money and day to day operations of Somerset.

“I don’t see his decision to formerly step down from his position as an advisor at Somerset Capital, effectively a non-executive role, as having any bearing on the way the business or the funds are managed, as he has not been hands on involved for some time.”

Rees-Mogg helped found the emerging equities boutique back in 2007 but had been working only as an adviser since becoming an MP.

He will remain a partner in the business, owning around 15% of issued share capital. Portfolio Adviser understands his stake in Somerset will be placed into a blind trust while he is a minister.

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