As Brexiteer Jacob Rees-Mogg struggles to garner enough support to oust UK prime minister Theresa May, one of his investment firm’s wagers is also looking questionable. Somerset Capital Management, which the MP founded, massively increased its long position in Alpha Bank this year.
However, the Greek lender has seen its stock price plunge around 40% in 2018 amid lingering doubts about its mountain of bad loans. The investment firm’s misjudgement comes as Mr Rees-Mogg’s political reputation as the darling of the Conservative Party’s right wing takes a knock.
His attempt to depose Ms May by encouraging colleagues to write letters of no confidence has so far failed.
“Jacob Rees-Mogg does not manage any money at Somerset Capital Management and has not done for a number of years,” said Oliver Crawley, a partner at the company.
“He is one of several shareholders,” Mr Crawley said.
The company has $7.5bn (€6.5bn) in assets under management. Somerset owned a 1.46% stake in Alpha Bank as of October 31. At the time it was worth about €30m.
While Somerset first disclosed a holding in the lender on September 30, 2017, it acquired most of its stake in the first quarter of this year.
Earlier this week, the shares dropped 8% to close at a record low of €1.07 in Athens, suggesting that the bet has been a losing one for Mr Rees-Mogg’s firm. The slump is system-wide, with the Athex Banks index dropping 53% this year. Yesterday, Alpha’s shares rose over 2% in Athens trading.