John Costas, the former head of UBS’s investment bank, and Michael Hutchins, once president of the Swiss firm's ill-fated internal hedge fund unit, have sold a majority stake in the boutique broker-dealer they founded two years ago.

Institutional Financial Markets, or IFMI, a quoted investment firm specialising in credit-related fixed-income investments, said in a statement yesterday that it would invest $45m in PrinceRidge through a combination of cash and an exchange of a stake in its capital markets subsidiary. In return, IFMI will take a majority equity interest in PrinceRidge.