Billionaire funder Mercer pulls rug out from under Milo Yiannopoulos -- and severs financial ties with Breitbart
Milo Yiannopoulos speaks to 'Nightline' reporter Terry Moran in an interview published on Sept. 2, 2016. (ABC News)

Hedge fund mogul Robert Mercer announced on Thursday that he was severing financial ties with Breitbart News and Milo Yiannopoulos -- while at the same time distancing himself from their controversial brand of politics.

In announcing his decision to sell his stake in Breitbart to his daughters and to sever ties with Yiannopoulos, Mercer insisted that he is not in political lockstep with either Yiannopoulos or Breitbart boss Steve Bannon.

"I have great respect for Mr. Bannon, and from time to time I do discuss politics with him," Mercer explained. "However, I make my own decisions with respect to whom I support politically."

When it comes to Yiannopoulos, Mercer said he felt outright regret for giving him financial backing. The controversial former Breitbart editor was busted via leaked emails directly engaging with white nationalists and helping them craft their narratives to garner more mainstream support.

Mercer said he originally backed Yiannopoulos because he believed Yiannopoulos offered a refreshing alternative to "political correctness" that has purportedly taken over American college campuses.

"But in my opinion, actions of and statements by Mr. Yiannopoulos have caused pain and divisiveness undermining the open and productive discourse that I had hoped to facilitate," Mercer wrote. "I was mistaken to have supported him, and for several weeks have been in the process of severing all ties with him."

Mercer is also stepping down from his position as co-chief of the hedge fund Renaissance Technologies.