Asian funds 'looking to multiple brokers for deals'

7 July 2008

Hedge funds are increasingly turning away from relying on a single investment bank for brokerage services, a new survey from AsiaHedge has revealed.

The analysis shows that, of the total number of hedge funds which either are managed or invest primarily in Asia, 326 used prime brokers for deals.

This is a 36 per cent rise over the previous year - outstripping the 20 per cent rise in the number of those who used a single broker, Bloomberg reports.

It is thought that the continuing fallout from the credit crunch - which saw one of the biggest global brokers, Bear Stearns, almost collapse in March - is behind the trend.

In a statement, AsiaHedge said: "[Bear Stearns] did at a stroke dramatically emphasize to hedge fund managers everywhere the counterparty risk of maintaining only prime broker relationship…investors are already pressing managers to diversify their exposure and establish multiple prime broker relationships."

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