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.”

The 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 shows 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.  

The business 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 has focused on investing in listed companies based in emerging markets including China, South Korea, India and Mexico. Its UK funds, include the top performing Somerset Asia Income Fund and Somerset Emerging Market Dividend Growth Fund, 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 , followed by Taiwan and Korea . Top 10 holdings include Taiwan Semiconductor Manufacturing Company , 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 , followed by Taiwan , Brazil , Korea and India . Top 10 holdings include Brazil’s energy company Prio SA, Taiwan Semiconductor Manufacturing Company , 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.