After it was announced that Somerset Capital Management, an investment firm that focuses on global emerging markets, would be wound down, Florida-based Polen Capital said that it would on-board several portfolio managers from the UK investment house.
Polen
Capital will be taking over the funds of UK-based
Somerset
Capital Management, which is being wind down after suffering
large redemptions and the loss of its biggest client, UK wealth
manager St James’s
Place.
Polen, which has had an emerging market offering since 2019,
will assume responsibility for the London-based suite of equity
funds, subject to regulatory approval.
“We are pleased to announce that the authorised fund manager of
our UK fund range will, subject to the completion of satisfactory
due diligence, appoint Polen Capital UK as the investment manager
for our funds,” a spokesperson for Somerset Capital said in
a note on Wednesday.
“As part of this appointment, a team of Somerset portfolio
managers, including Mark Williams, portfolio manager of the Asia
Income and Emerging Market Dividend Growth strategies, will be
joining Polen Capital’s established emerging markets team based
in London and Asia,” the spokesperson continued. “This will
ensure continuity of investment process and fund objectives.
Polen Capital has committed to undertake the promotion and
distribution of the funds with a view to ensuring their future
growth and longevity.”
Polen Capital group manages over $60 billion in assets for
clients around the world. “This asset base, combined with Polen’s
global distribution capabilities, will provide a strong
environment in which the Somerset funds can perform,” the firm
said.
Somerset Capital lost two-thirds of its assets after it was
dropped by SJP. This was part of the latter firm’s drive to lower
fees, leaving Somerset with $1 billion in assets, down from a
peak of $10 billion in 2018. It is an example of the impact of
regulatory pressure on wealth managers under the Financial
Conduct Authority’s new Consumer Duty, which requires firms to
show that they are delivering good outcomes for consumers. See
more here.
Somerset Capital was co-founded 16 years ago by Conservative MP
Jacob Rees-Mogg, who was a former UK government minister and
prominent advocate for Brexit.
Somerset Capital said it will be closing its wider institutional
business in London.
The firm focused on investing in listed companies based in
emerging markets including China, South Korea, India and Mexico.
Its UK funds, including the top performing Somerset Asia Income
Fund and Somerset Emerging Market Dividend Growth Fund, were
managed by portfolio manager Mark Williams, along with the
investment team.
Here are some details of the funds.
Somerset Capital’s Asia Income Fund
The fund aims to generate returns over the long term via income
and growth, with a concentrated portfolio of 40 to 60
well-managed companies. It has outperformed the index over a
three and five-year period and is also performing well so
far in 2023.
The fund is heavily weighted towards China and Hong Kong (40.9
per cent), followed by Taiwan (22.8 per cent) and Korea (9.7 per
cent). Top 10 holdings include the Taiwan Semiconductor
Manufacturing Company as well as Taiwan’s Wistron, Korea’s
Samsung Electronics and Korea’s KB Financial Group. They also
include China’s energy company CNOOC and Anta Sports Products.
Top sectors include IT, followed by industrials, financials and
consumer discretionary.
Somerset Capital’s Emerging Markets Dividend Growth
Fund
The fund aims to generate total returns over the long term via a
combination of growth and income, with a concentrated portfolio
of 30 to 50 well-managed companies. Although performance was down
in 2022, it has outperformed the index in 2023 and in 2021.
The fund is heavily weighted towards China (28.2 per cent),
followed by Taiwan (17.7 per cent), Brazil (13.3 per cent), Korea
(12.2 per cent) and India (8 per cent). Top 10 holdings include
Brazil’s energy company Prio SA, Taiwan Semiconductor
Manufacturing Company (TSMC) and China’s manufacturing firm BYD
Co, as well as India’s service provider BLS International
Services. Top sectors include IT, followed by financials,
industrials, consumer discretionary and healthcare. See more
here
about the firm.
