Every dog has his day, and today it's the turn of a peculiarly English breed: the corporate broker. In some ways a relic of the days when one could deal with the London Stock Exchange only through one of its member firms, the group has been derided as a vestige of "gentlemanly capitalism." But today corporate broking is enthusiastically embraced by most of the big investment banks operating in London, and no wonder. While the debt markets remain quiet, the corporate broker, a retained equities adviser, is at the center of much of the financing action and at the core of a struggle for market share in Europe's most important financial center.

A corporate broker acts as a perennial adviser to a corporation, working closely with the CFO and CEO, acting to arrange, for a handsome fee, rights and stock offerings. More and more U.K. companies, unable to rely on banks for debt funding, are turning to their shareholders for cash. Forecasts suggest equity raisings could amount to as much as £50 billion ($65 billion) in the U.K. this year. 

As of March, research firm Dealogic reports, there were some 15 rights issues in the works as companies look to raise a total of £20 billion. "We expect to see a number of rights issues over the next six months," says John Woolland, co-head of corporate broking at UBS.

UBS ranks second among U.K. corporate brokers, behind J.P. Morgan Cazenove Ltd. and ahead of Bank of America Merrill Lynch.

Fundraisings are generating substantial fees across the sector. Goldman Sachs International and J.P. Morgan Cazenove are reportedly taking £115 million in fees as lead underwriters of HSBC Holdings plc's £12.5 billion rights issue, the biggest ever in the U.K. The total fee pool, including sub-underwriters, is £300 million, an enormous sum at any time but even more valuable at a time of turmoil for the banks. The other big rights issue now is mining company Xstrata plc's £4 billion fundraising, which is expected to yield the underwriting banks £100 million in fees, a large proportion of which lead underwriters Deutsche Bank AG and J.P. Morgan Cazenove will take.

Says Woolland at UBS, "As a corporate broker, you always have access to finance directors or chief executives, whatever market conditions are like. We've been able to win business for other parts of UBS on the strength of broking relationships. It's different from the U.S and continental Europe, partly for historical reasons, because all listed U.K. companies once had to have a corporate broker in order to communicate with the stock exchange. It's a model that only really exists in a few other countries, including Ireland and Australia," he says.

Adds Charles Wilkinson, head of corporate broking at Deutsche Bank, "The corporate broking model is incredibly valuable at a time when companies may be considering various capital-raising alternatives. Management can discuss sensitive topics with advisers whom they speak to every day regardless."

In some cases, notably David Mayhew of J.P. Morgan Cazenove, the adviser is the biggest rainmaker in town.

At Merrill, the commitment of its new owner, Bank of America Corp., to investment banking is widely questioned, especially after Michael Findlay, the firm's former co-head of corporate broking, left in February to join his family business. But Mark Astaire, co-head of corporate broking, says, "Bank of America Merrill Lynch is absolutely committed to corporate broking and to maintaining our franchise as one of the top three brokers in Europe. We are actively seeking to win new clients, and we would consider selectively hiring senior professionals."

UBS, which has 29 FTSE-100 clients, is not paying bonuses to its senior investment bankers this year, and the bank declines to comment directly on how this is affecting its business, but Woolland says, "A number of FTSE-100 companies are asking us to pitch, and we're certainly ready to take on more clients. We have a team of 60 now which we have no plans to cut."

Though companies have traditionally stuck with their chosen brokers, changes are now taking place more frequently among FTSE-100 companies. That's driven partly by management changes at the companies themselves but also by the disappearance of several franchises, notably Lehman Brothers Inc., which had six FTSE-100 broking clients when it collapsed in September 2008, and by the winding down of Dresdner Kleinwort's broking business. Other franchises might soon look vulnerable. The strategic review taking place at Royal Bank of Scotland Group plc is creating uncertainties at its Hoare Govett Ltd. unit, which has 15 FTSE-100 clients, and Citigroup Inc., which has 17 FTSE-100 clients, has recently lost three experienced members of its team. "Companies do not change broker easily, and the process can be quite slow when it does happen. But I think this year could see perhaps 10 FTSE-100 companies switch broker, although, of course, the exact figure is difficult to predict," Wilkinson says.

Such instability offers opportunities for firms such as Deutsche, which has avoided the worst of the financial crisis. "We're in a strong position to build our franchise. We now have 18 FTSE-100 clients, and we'd like to grow that number. We have also made a few strategic hires recently," says Wilkinson, who heads a team of 25 professionals.

J.P. Morgan Cazenove, the broker with the most FTSE-100 clients, 35, is also in good shape, having recently reported equities revenue for 2008 that was down only 12%, at £178 million. Still, potential conflicts of interest might preclude further expansion of its list. Other forces to be reckoned with include Morgan Stanley, which has built up a considerable client list, including 15 in the FTSE-100, in recent years under ex-Merrill broker Paul Baker, and the highly selective but powerful Goldman.

Intriguingly, new entrants to corporate broking are also emerging, and they too could take a share of the spoils. Nomura Holdings Inc. last year took on some of Lehman's former team, including Charles Donald and Stephen Pull, and now has four FTSE-100 clients. Observers also expect Barclays Capital, a Barclays plc unit that is building a presence in equities, to open a corporate broking business soon.

Don't expect this old dog to lie down just yet.