Dominic Johnson: Somerset Capital became ‘a nicer place to work during the crisis’

“It could not have been a better time for our clients. We transitioned the best part of $1bn from people’s spare bedrooms, kitchen tables, panelled libraries and basements. It has been wonderful,” Somerset Capital Management’s CEO Dominic Johnson told Investment Week, when asked about having to suddenly adapt to a world of working from home.

“This is due to a combination of great technology, having a BCP [business continuity plan] in place, great clients who worked with us through the process and fantastic teams just getting on with it.”

Amid a global pandemic and one of the sharpest economic downturns in modern history, emerging market specialist boutique Somerset Capital was handed the contract for St James’s Place’s £930m global emerging market mandate.

It also hired former head of China at RWC Partners Min Chen from Dymon Asia ahead of plans for a new Chinese equity portfolio, launched the Somerset Emerging Markets Future Leaders UCITS fund, and snapped up Liontrust’s head of Asia Pacific equities Mark Williams and his £80m Asia Income fund following Edward Lam’s departure.

“That has been peculiar, because I have hired people whom I have never met,” Johnson said.

“It is also particularly unusual for Somerset because we are a boutique; the culture is the invisible glue that binds people together.

“But, we have very successfully integrated Williams and Chen. They could not have fitted in any better. An intriguing side effect of Covid has been we made an extra effort to integrate them and to communicate, whereas in the office we might not have gone over to the other side of the room to speak as regularly.”

In terms of hiring Williams, Johnson said he has known the manager for a long time, and had even spoken about collaborating in the past before Lam left Somerset to pursue other opportunities.

“His track record is very strong, he thinks like us, and he has actually worked with Anthony [Linehan] before during his time at F&C, who runs our Future Leaders fund. I already knew he would be an excellent and complementary fit for our team,” he explained.

“It was literally a 30-second phone call with [Liontrust CEO] John [Ions] – it was wonderful to deal with him. All credit to him for wanting to focus his business.”

The CEO said hiring Singapore-based Chen was “a bit more complex”, but was recommended the manager by “a good person on the ground there who is constantly looking for opportunities”.

“The fact Chen is based in Singapore has actually helped because they have handled lockdown slightly differently,” he explained.

“They simply locked Singapore down so you could not get in or out, which meant the country was able to operate relatively normally, and meant the team in Singapore has been integrated quite successfully.”

Sprint to finish line

In all, Johnson said 2020 was a good year for the business, with assets under management experiencing a “great sprint to the finish line” in 2020.

However, he said there has been a “human cost” to the pandemic, with some colleagues beginning to

suffer psychologically from a lack of physical interaction.

“Those elements are invisible, but will cause organisational issues over time, so I am very glad we will hopefully be able to open our office from April,” Johnson continued.

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