Jacob Rees-Mogg Set for £4.4M Payout from Liquidated Fund Management Firm
Former MP Jacob Rees-Mogg and 23 other shareholders to share £4.4M from Somerset Capital Management's liquidation. The firm, co-founded by Rees-Mogg in 2007, closed after losing major client.
Jacob Rees-Mogg, former Conservative MP, is poised to receive a portion of a £4.4 million payout following the official liquidation of his fund management company. This development comes approximately nine months after Somerset Capital Management announced its closure in December 2023.
The liquidation process, initiated last month, involves 24 shareholders, including Rees-Mogg, who are expected to recover funds from the defunct organization. James Cowper Kreston, an accountancy firm, has been appointed to oversee the company's wind-down.
Somerset Capital Management's demise was precipitated by the withdrawal of its major client, St James's Place, due to unsatisfactory performance. This decision left Somerset with only £760 million in client assets, rendering the business financially unviable.
Despite its closure, Somerset Capital has maintained a positive financial position. A solvency report filed with Companies House indicates a £4.4 million surplus and no outstanding debts. On August 1, 2024, a vote determined that this surplus would be distributed among the partnership's members.
Founded in 2007 by Rees-Mogg, Edward Robertson, and Lord Johnson, Somerset Capital specialized in emerging markets investments. The trio previously worked at Lloyd George Management in Hong Kong before establishing their own firm. At its zenith in 2018, Somerset Capital managed assets worth £7.6 billion.
"The costs of running the business exceeded the amount that could be generated from fees."
The company's decline was marked by St James's Place's withdrawal of a £1.9 billion mandate in December 2023. This loss led to Somerset's decision to close, as operational costs surpassed potential fee revenue. Subsequently, Polen Capital, a US-based fund manager with a London presence, acquired Somerset's remaining UK funds.
Financial records reveal that Somerset Capital's profits had already halved from £9.1 million to £4.2 million in its final operational year, with revenues declining from £23.5 million to £16.6 million.
It's worth noting that Rees-Mogg, who served as Leader of the House of Commons from 2019 to 2022, lost his parliamentary seat in the recent election. His involvement in Somerset Capital as both a shareholder and partner underscores the intertwining of political and financial careers often seen in high-profile figures.
The liquidation process may take up to a year to complete, meaning shareholders should not anticipate an immediate payout. This timeline is typical for complex financial dissolutions, ensuring all assets are properly accounted for and distributed.
Requests for comment from Rees-Mogg, the appointed liquidators, and Somerset Capital representatives were met with silence, leaving questions about the specifics of the payout distribution unanswered.
This event marks the final chapter for Somerset Capital, a once-prominent player in the emerging markets fund management sector. Its rise and fall reflect the volatile nature of financial markets and the challenges faced by investment firms in maintaining consistent performance and client trust.
