Jacob Rees-Mogg’s City investment firm has cashed in its stake in the Russian lender Sberbank, avoiding this January’s turmoil on the Moscow stock exchange caused by rising tensions on the border of Ukraine.

Somerset Capital Management, which was co-founded by the Leader of the House of Commons, sold its final shares in the bank in autumn last year as Vladimir Putin built up a massive military force.

Mr Rees-Mogg maintains a shareholding in Somerset Capital Management but is not involved in its investment decisions. He set up the fund with Dominic Johnson, a former vice-chair of the Conservative Party, and fund manager Edward Robertson in 2007. Mr Rees-Mogg stepped back from active work on its investments when he became an MP in 2010. He worked as a part-time adviser on the fund until 2019.

Sberbank’s shares have plummeted due to the escalating tensions in Ukraine. Its shares have fallen by more than 30pc since October 2021. Russian stocks have suffered generally amid speculation of further sanctions on businesses from the West. International banks have now been told to prepare for restrictions on Russian businesses and individuals.

Somerset Capital Management drew fire for its investment in Sberbank in 2018. The fund was criticised by Labour and market commentators for maintaining a £44.5m investment in the bank while Mr Rees-Mogg was involved in policy debates about  Russia and Mr Putin. Sberbank’s chief executive is Herman Gref, a Putin ally who was economic minister between 2000 and 2007.

Mr Rees-Mogg has said that Britain “must not deal with Putin” due to Russia’s alleged involvement in the poisoning of a former Russian military office in Salisbury in 2018. He has also supported measures to freeze Russian assets in Britain. 
But he has said Somerset Capital Management does not invest his money and has a stated aim to invest in emerging markets.

Somerset Capital Management started winding down its holding in Sberbank in 2019. It sold its final 361,861 shares between September and November 2021.

Mr Rees-Mogg did not respond to a request for comment. 

Oliver Crawley, partner at Somerset Capital Management, said: “Jacob Rees-Mogg no longer works at Somerset Capital Management and has had no role in any of the firm’s investment decisions for over a decade. 

“Somerset Capital’s funds, including the Somerset Emerging Markets Dividend Growth Fund, are solely mandated to invest in emerging markets including China, India, Brazil and Russia.”