Jacob Rees-Mogg takes £200,000 hit to his Somerset Capital dividend

Are times getting tougher for those living in the eighteenth century? Doubt it – Owl

Patrick Hosking www.thetimes.co.uk

Jacob Rees-Mogg is thought to have taken a dividend cut of about £200,000 this year after the City investment firm he co-founded suffered a one-third slide in profits.

Rees-Mogg, who is leader of the Commons, is thought to have received dividends this year of about £600,000 from Somerset Capital Management, down from £800,000 in 2020.

Somerset, which manages investments in emerging markets on behalf of retail and institutional investors, reported profits for the year to March 2021 of £9.7 million, down 35 per cent year-on-year.

The firm warned that it expected profits to fall again in the current year, suggesting that Rees-Mogg is set to take another cut in income next year.

Rees-Mogg, 52, who attends cabinet, is thought to be one of the highest paid MPs thanks to Somerset, which he set up in 2007 and continued to run until 2019 when he severed all direct links with the firm to join the government. He remains a sleeping shareholder.

A year ago he owned about 14 per cent of the London-based firm, but he has pledged to reduce his stake as he sells shares to new partners in the hope of maintaining Somerset as a perpetual partnership.

The profit fall at Somerset came despite the firm lifting its total assets under management from $5.6 billion to $7.3 billion.

The company said that it had been hit by lower management and performance fees, as well as a small rise in costs because of new hires.

Dominic Johnson, chief executive and co-founder, said: “Emerging markets and Asia always have challenges and risks — but that is what makes them such an exciting asset class for active managers.

“We are particularly optimistic about our Asia Income Strategy, which has continued to perform strongly since Mark Williams and the team joined in October last year.”

Somerset has been pushing much deeper into investing in China, a market Rees-Mogg regarded with caution when he was in charge.