Numis Securities, the corporate advisory and broking company, has raised its stake in Paternoster, the pensions buyout vehicle.

Numis invested a further £2 million, taking the total invested in the business to £10 million, equating to about 2 per cent of Paternoster. Oliver Hemsley, Numis's chief executive, said that it had advised on a further capital-raising by Paternoster and had raised its stake in the business instead of a taking a cash fee for its work.

Paternoster was launched in December 2005 by Mark Wood, the former head of Prudential's UK business, with a loan provided by Numis. He then raised about £500 million of start-up capital from Numis, Deutsche Bank and Eton Park, the private equity company, before buying a clutch of pension schemes, including those of P&O, Lonmin and TI Group, the engineering company.

Paternoster completed £2.7 billion of pension buyouts in 2007 and a further £1.1 billion in the first nine months of this year - but Mr Wood gave warning in late October that he expected new deals to be postponed until 2009.

News that Numis had raised its stake came as the company reported a slump in full-year pre-tax profits from £38.8 million to £16.1 million. More than half of that is thought to have come from the flotation of Abbey Protection, the insurer, where Numis was an adviser.

The company, which is 50 per cent-owned by its staff, also cut bonuses from £14.1 million to £5.6 million, with the average bonus dropping from £83,000 to £33,000.

Despite the grim outlook, Mr Hemsley insisted that Numis was hiring staff, including some from supposedly bigger names in the investment banking world. These include Tim Rowntree and Mark Lander — corporate brokers poached from Hoare Govett and Panmure Gordon, respectively - and an entire team of traders from Kaupthing, Singer & Friedlander Capital Markets, led by Marcus Chorley, a 15-year veteran of UBS, who becomes the new head of sales and sales trading.

Mr Hemsley told The Times: “The only time you can ever build a business like this is when things are tough — otherwise, we would be competing with people offering very tough renumeration packages.”

He insisted that, while it was impossible to predict when conditions would improve, Numis was increasingly confident of emerging from the financial turmoil as a key player in British investment banking and stockbroking.

Mr Hemsley said that Numis had been a significant beneficiary from the collapse of Lehman Brothers — which, before it fell, had accounted for 15 per cent of research, sales and trading of stocks in the FTSE 250.

Shares of Numis closed down 1p at 110p.

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