I speak to Jacob Rees-Mogg down a crackling phone line. Despite the poor-quality of the sound, his voice is unmistakeable: those rounded Edwardian vowels; the careful, deliberate delivery of phrases which fall slightly at the end, like a gramophone needing an extra turn of the crank. It is as though some enterprising audio-logist had devised the perfectly reassuring voice and presented it, with great doses of warmth and humour, in this double-breasted package.
A figure of intrigue (and not a little amusement) in the political world since first standing for Parliament in the safe Labour seat of Central Fife in 1997, there is a side to Rees-Mogg which few in the Westminster bubble see: that of the successful financier. The investment company of which he is the chairman, Somerset Capital Management, was founded by Rees-Mogg, Dominic Johnson and Edward Robertson in 2007 and currently has $7.6-billion under management, with offices in London and Singapore. The three men were colleagues at Lloyd George Management in Hong Kong before leaving to found SCM. Robertson and Rees-Mogg had been responsible for building the company’s emerging-market products, the sector which forms the basis of SCM’s investments.
His career as an investor began early; indeed, one might say he was something of a prodigy. At the age when most boys are playing cricket or football, Rees-Mogg was playing the stock market. ‘I was left £50 when I was ten by a fairly distant cousin, which my father invested in GEC shares on my behalf,’ he says. ‘I became interested in the market and was given some more shares by my father, which is when I began looking to see how the shares were performing and learning how to read company reports, balance sheets and so on in order to gauge that.’ That’s unusual enough, but what happened next was truly remarkable. ‘I had these GEC shares and went to a shareholders’ meeting,’ he says. ‘I’d been looking over the company report and thought the dividend was too low, so I voted against it. Then I went to the Lonhro AGM when it was going to buy the Observer. I thought this was a bad idea, so asked a question at the end.’ He was 12 at the time. It is was as a result of this intervention that Rees-Mogg was photographed at home reading the Financial Times, a typewriter in front of him and a teddy bear behind. That photo, above, has often been used to portray him as an upper-class nerd, but looked at more closely it reveals something more fundamental to his character: an intense seriousness of purpose.
Rees-Mogg never thought of his youthful investments as the pastime of a rich, dilettantish boy, despite later portrayals. Investing was, and remains, a serious business, to be undertaken only after thorough research and with considerable caution. The ‘Investment Philosophy’ page of SCM’s website emphasises sustainable returns, long-term management, research, and capping strategies — all fundamentals of the Rees-Mogg investment philosophy and, he says, the reason for his success.
A Cherwell article on Rees-Mogg published during his first year at Oxford alleges that he was a millionaire by the age of 16 and paid his own school fees out of the profit on his early investments. This is untrue, he says, but shows the degree to which Rees-Mogg’s financial acumen had impressed — or, in some cases, annoyed —his contemporaries from an early age. Similar stories (all untrue) about his having employed fellow Etonians to polish his shoes and follow him with an umbrella on cross-country runs reinforce the impression that here was a man whose self-confidence was off the charts, even by Etonian standards. It also explains his seeming imperviousness to ridicule, despite much of it being mercilessly cruel. The story of his having canvassed Fife in a Bentley with his nanny used to be wheeled out by his detractors in an attempt to show how terribly grand and unworldly he was. (‘It was a Mercedes,’ he tells me. ‘A Bentley would be most unsuitable for canvassing.’) Now it is more often told with affection, even by Labour colleagues in the Commons, which demonstrates his knack of deflecting criticism and eliciting warmth from the most unlikely sources. It helps that he’s genuinely self-deprecating. When I put it to him that SCM has done well because of his guiding principles, he demurs. ‘Our success is all down to my partners,’ he says. Following a first in history from Trinity College, Oxford, during which he continued to invest on his own behalf, Rees-Mogg went to work for Rothschild’s. It was here he came under the influence of legendary Anglo-Estonian fund manager Baron Nils Taube, described in his Daily Telegraph obituary as ‘one of the best [City fund managers], having returned more than 15 per cent a year for the two funds he ran continuously between 1969 and 2006 — a remarkable record’.
Taube had begun as an office junior at Kitkat & Aitken in 1948, rising through the ranks to become an analyst in 1951, a fund manager in 1969 and a senior partner in 1975. He was renowned for his caution. ‘We only invest in countries where they wear overcoats in the winter,’ he joked. These principles of circumspection and deep research chimed very much with Rees-Mogg’s inclinations and reinforced his idea that they were the key to long-term investment success. ‘I went into investments out of interest and thought I knew a little. The longer I’ve been involved, the less I realise I’d known... I’m very lucky not to have lost most of my money — I simply hadn’t the knowledge I do now. I’ve never put all my eggs in one basket and I’ve always been cautious.’
This is the theme to which Rees-Mogg returns time and again during our conversation: before investing, one must gather as much knowledge as possible about what one proposes to buy and never become overexposed in any one particular area. I put it to him that his financial success and the accompanying security have enabled him, still at a relatively young age, to devote his life to public service — that his wealth makes him incorruptible, unlike some of his colleagues. Here I glimpse for the first time the steeliness beneath the surface of his courtly good manners. ‘Many of my colleagues have blemish-free records,’ he says. ‘It’s a very small number who have engaged in that sort of thing. Outside interests are a good thing for Parliament: the major benefit is the expertise these people bring to the institution. One doesn’t need money to run for Parliament, but it is undoubtedly expensive. The costs are not just specific costs, there’s also the effect on careers — one misses out on promotions. It isn’t easy to quantify, but it’s a price most are willing to pay. Indeed, the price paid by some is very great.’
There are, of course, dissenting voices, who say that his reputation as a financial wunderkind is undeserved. According to one former colleague at Lloyd George Management in Hong Kong, ‘Jacob was a pedestrian fund manager, always more interested in politics than investment — he never outperformed the index. He was great friends with Chris Patten and was always in and out of Government House, working on his political reputation.’
The same colleague also questions whether Rees-Mogg really is the courtly, self-effacing gent he always appears to be. ‘I saw him accost a former manager to complain his seven-figure bonus wasn’t sufficient — in the line-up at his own wedding,’ he says.
Rees-Mogg’s wife, the former Helena de Chair, brought her own money to the marriage. She is the daughter of Lady Juliet Tadgell, formerly Marchioness of Bristol, and ex-Tory MP, author and poet Somerset de Chair. Lady Juliet is heir to the Fitzwilliam fortune and has an estimated net worth of £45 million, all of which Helena stands to inherit as her only surviving child. It was under one of his mother-in-law’s six Van Dycks that Rees-Mogg proposed to Helena at Bourne Park, her mother’s stately home in Kent, which she also stands to inherit. This will add to the family’s already substantial property portfolio, which currently comprises a Mayfair townhouse, a Grade II-listed manor house in Rees-Mogg’s Somerset constituency and an interest in several other London properties.
When Helena comes into her inheritance, the Rees-Moggs’ net worth will be in excess of £100 million, and possibly as high as £150 million. Meanwhile, though he is no longer actively involved in the investment side of SCM (Dominic Johnson took over from him as chief executive in 2010) Rees-Mogg still receives an average of £11,730 a month in his capacity as a partner, which together which his MP’s salary gives him an income of at least £216,000 a year.
As our conversation draws to a close, I ask Rees-Mogg whether he would leave finance and pursue other interests if he lost his seat. ‘No! Finance is my profession and my great interest. Had I lost my seat in 2015 I would have gone back to SCM and continued my career.’
It has been overwhelmingly evident throughout the interview that the Honourable Jacob Rees-Mogg MP is a member of that rare and happy breed who have been able to turn their passion into a career — in his case, doubly so. Whatever his political future, it’s safe to assume that he will be keeping a weather eye on the markets for many years to come, if only to manage the Mogg millions.