Investec, the mid-sized investment bank, has capitalised on turmoil in the FTSE 250 corporate broking market, winning 13 new mandates in the past year and on Monday picking up a 10-person team from rival Dresdner Kleinwort, writes Brooke Masters.

Led by Jim Hamilton, Dresdner’s former head of corporate broking, the team includes eight brokers and two analysts from Dresdner, where London operations are being scaled down by new owner Commerzbank.

Investec added Dechra as a new broking client last week, bringing its list of FTSE 250 broking mandates to 22, nearly triple the eight clients it had in early 2008. Despite the fastest growth rate in the sector, it ranks sixth in the Hemscott Rankings Guide, far behind market leader JPMorgan Cazenove.

The credit crunch has wrought unprecedented change both at bulge bracket banks and at UK plcs, raising hopes at Investec and other smaller competitors.

Collins Stewart, best known for its clients on the junior Aim list, has announced plans to head upmarket and target the FTSE 250. Noble recently hired two co-heads of corporate broking, both formerly of Merrill, with an eye towards moving into the FTSE 250 broking market.

“There are opportunities and there are going to be winners,” said David Currie, co-head of investment banking and securities at Investec, which is listed in the UK and South Africa.

Among the FTSE 250, the smaller companies tend to pay retainer fees, though the bigger ones resist, leaving brokers to rely, as they do with FTSE 100 clients, on transaction income.

Broking relationships are also famously sticky and companies generally choose a broker with strong research and secondary trading platforms in addition to relationship skills.

“The acid test is can you place the stock and do the deal? If you don’t have the flow, the salesmen and the analysts, you are dealing blind,” said Mark Astaire, co-head of corporate broking at Merrill.