In the Hot Seat by Miles Nolan

It’s a cold November day and I’m struggling to gain access to the Numis office, due in no small part to the student protests taking place outside. Based by St Paul’s Cathedral, the well-respected broker shares the same building as the London Stock Exchange.

In the calm of his fifth-floor office, Oliver Hemsley is quick to greet me: ‘In this business you’ve got to be strong and well capitalised to survive,’ he quips. With cash of £45 million, and a 13 per cent stake in quoted legal insurance specialist Abbey Protection, Numis is in rude health – a position that many of its weaker rivals will envy.

Hemsley is the son of a Rutland pig farmer. Having ‘forgotten to go to university’, his first job was at 18 when he worked as a photocopy assistant in the Lloyd’s insurance market – he went on to be an underwriter for ten years. 

Ever ambitious, he established a new stockbroking firm, Hemsley & Co, which was focused on share trading for Lloyd’s members  and currency trading for Lloyd’s syndicates. He merged the operation with a private client broker to become Raphael Zorn Hemsley Ltd. The private client arm was sold in 2000, allowing Hemsley to set about hiring ‘great people’, build an investment banking business and change the name to Numis – from the greek word for ‘coin’.

Today, Numis is 50 per cent employee-owned, and has 180 staff. It has over 140 corporate clients, with recent wins including Ocado, Kier and China Food. It has recently raised £45 million for Circle Holdings, an operator of private hospitals in the UK. Numis has also secured $200 million for CATCo, a new reinsurance vehicle.

It also procured £400 million for cash shell Horizon, which has been renamed APR Energy and is a provider of temporary power – in the vein of Aggreko. In fact, Numis can boast of raising £3.4 billion for its clients since 2009. It also tops the list of money raised for new issues this year – £63 million thus far.

With a 15-strong team, Numis has over 800 institutional clients and operates the largest UK mid-cap sales desk in London. It now has 27 FTSE 250 clients, and even acts for investment firm Hargreaves Lansdown – its first FTSE 100 client. The average market value of its clients is £300 million.

Ranked top three in the annual Extel Survey for seven sectors, Numis has a strong team of 35 equity analysts.

Big banks lose their bottle

Hemsley argues that as the big banks retrench from lending and broking, it is primed to pick up new business. He also stresses that brokers must also offer clients both equity and debt instruments, particularly in times when fresh capital is hard to come by. But Hemsley is not prepared to get into a price war. It charges a minimum £75,000 for its retained clients – setting it apart from smaller rivals. Corporate finance is an essential part of the firm. Indeed, the team recently advised on the £153 million sale of domain name specialist Group NBT to private equity house Hg Capital.

Recent interim results confirm that trading has picked up recently, and the AIM counter also pays a chunky 8.6 per cent dividend. 

It’s not all been plain sailing though. Numis has been doing battle with US investment giant Fidelity, over claims of ‘fraudulent misrepresentation’ with regard to a share placing in Rock Well Petroleum and a potential lawsuit the oil firm was facing. Without any admission of liability, Numis recently settled for $8 million and intends to continue a ‘mutually beneficial commercial relationship’.

No stranger to big institutions, Numis counts BlackRock, Aberdeen Asset Management and Aviva as major shareholders, but Hemsley still retains a 15 per cent stake and is very hands on, typically starting work at 6.30am. Aged 49 and married with three children, Hemsley spends his weekends in Dorset – a good place to relax from fast-paced City life.