The fund management group founded by City veteran Martin Gilbert is in talks to absorb parts of the firm co-founded by Sir Jacob Rees-Mogg, the former minister.
Sky News has learned that London-listed AssetCo is one of a number of suitors circling Somerset Capital’s management, which announced last week that it would settle itself following the loss of St James’s Place, its biggest customer.
City sources said on Monday that AssetCo, which has a market capitalization of just £69m, was likely to be interested in taking on two of Somerset’s fund managers rather than acquiring a larger chunk of the business.
Sir. Gilbert, the former Aberdeen Asset Management boss, has tried to pick up AssetCo through acquisitions but has seen its performance lag.
Its shares have fallen by a third over the past year.
Sir Jacob has had no day-to-day involvement in Somerset since 2010, when he became an MP, although he retains a financial interest in the partnership.
Lord Johnson, the investment minister, ran Somerset as chief executive until he was knighted by Liz Truss during her brief premiership last year.
The identities of other parties interested in taking over Somerset’s funds were unclear Monday.
Somerset is now said to manage less than $1bn. in assets, although it declined to comment on either that figure or its talks with AssetCo and other suitors.
Oliver Crawley, a partner at Somerset, said last week: “The current teams have delivered strong performance for their investors and continue to do so.
“We hope that a transition can be secured, which we believe will give the funds a bright future.”
A spokesman for AssetCo also declined to comment.