SOMERSET EMERGING MARKETS: Globe-trotting manager finds jewels
Investment house Somerset Capital Management is a boutique asset manager specializing in emerging markets. Co-founded 16 years ago by Conservative MP Sir Jacob Rees-Mogg, it now manages £3.3 billion and has offices in Shanghai, Singapore, and the UK.
Its investment managers – with a mix of global emerging market mandates, Asia-specific and China-only funds – extensively travel to meet companies in search of profitable businesses and to assess existing ones.
One of its frequent travelers is Kumar Pandit, the joint manager of the company’s Emerging Markets Dividend Growth fund. In the past year, he has visited China, India, Indonesia, South Korea, Taiwan, and Vietnam to uncover opportunities for the fund.
‘Yes, a lot of the financial analysis on investible companies can be done in the office in the UK,’ says Pandit, ‘but meeting businesses face-to-face is crucial to our work, whether it’s in their home country or at conferences in the UK. We need to understand what management is thinking.’
The fund managed by Pandit and Mark Williams has an income focus, albeit unusual for an emerging markets vehicle. ‘We aim to hold companies that generate significant cash and distribute some of it to shareholders through dividends,’ adds Pandit.
This approach hasn’t been without challenges, especially due to the prolonged lockdowns triggered by Covid. However, Pandit states that many emerging market companies in countries like Brazil, South Korea, and Taiwan have a long-term trend of paying dividends to shareholders.
Last year, the fund paid around 1.8p per unit in dividends to investors, compared to 3.3p the previous year. Encouragingly, this year’s interim payment has shown improvement compared to 2022.
Unlike other emerging market funds, like Mobius, that hesitate to invest in China due to geopolitical concerns, Pandit is more relaxed. He describes the prospect of a China invasion of Taiwan as
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
