Somerset Capital Management, the investment firm co-founded by Jacob Rees-Mogg, has said it will be wound down, days after it emerged it had lost two-thirds of its assets and its largest client. The firm said on Thursday that it would be closing its London business, which manages funds on behalf of institutional clients, such as asset managers and pension funds, and that it was in advanced talks to transfer the remainder of its top performing funds to a new investment adviser. It is unclear whether Rees-Mogg, who co-founded the fund in 2007 and remains a minority shareholder, will have effectively made a loss on his stake as a result. The Tory MP is reported to have pocketed at least £7.5m in dividends from Somerset since the EU referendum in 2016, including £500,000 in 2022. He also received about £15,000 a month from the firm on top of his MP’s pay until 2019, when he became a minister under Boris Johnson. His stake in Somerset is not public, but it is believed to have been about 12%. He has remained a passive minority shareholder since stepping back from advising on investment strategy and the daily running of the business. Rees-Mogg set his sights on wealth at a young age, and worked for hedge funds in Hong Kong and Mayfair before setting up Somerset. He became an MP in 2010. Somerset Capital’s wind-down comes days after it emerged that St James’s Place, which is the UK’s largest wealth manager and had been Somerset’s largest client, had ended its relationship with the firm and shifted a £2bn mandate to another fund manager. The shock move left Somerset with $1bn (£796m) in assets, down from a peak of $10bn in 2018. It also comes more than a year after Somerset started exploring a potential sale of the business, in preparation for Dominic Johnson’s shift into politics. Johnson, another co-founder, is now minister for investment under Rishi Sunak. Rees-Mogg and his fellow shareholders have been in line for a windfall from their investment several times as Somerset flirted with a succession of deals. The firm was valued at between £70m and £100m in 2018 when it entered inconclusive merger talks with an unnamed US firm. It rejected a bid of up to £90m from London’s Artemis Investment Management the following year and a mooted deal with Emso Asset Management last year was also not completed. The value of its assets more than halved in the four years after the first approach, to $5bn in 2022, and has since tumbled further. One of Somerset’s partners, Oliver Crawley, said: “It has been a privilege to manage capital for world-leading institutions and clients for over 16 years. I am incredibly proud of all we have achieved in that time through the hard work and skill of our dedicated team. “The current teams have delivered strong performance for their investors and continue to do so. We hope a transition can be secured which we believe will give the funds a bright future.” Somerset has traditionally invested in listed companies based in emerging markets including China, South Korea, India and Mexico, and is believed to have benefited from the drop in the value of the pound after the Brexit vote because its holdings were overseas. Somerset described Brexit as a financial risk in a 2018 prospectus to a new fund it launched, at a time when Rees-Mogg was among the most prominent proponents of a “hard” Brexit in which the UK left the EU’s single market. The Guardian has also previously reported that Somerset was an investor in oil and coal mining. Rees-Mogg has been an advocate for the continued extraction of fossil fuels. A spokesperson for Somerset Capital declined to provide any further comment. Rees-Mogg did not immediately respond to requests for comment.