Hedge fund managers are increasing the number of prime brokers they use in an effort to reduce counterparty risk, a new Omgeo-commissioned survey has found.

The report, carried out by Greenwich Associates, found that 60% of managers worldwide have diversified their prime brokerage list, with the ratio hitting 78% in Asia.

Many hedge funds were hit by the collapse of prime broker Lehman Brothers in 2008 and it is likely that this and the wider financial crisis have led to an increased focus on risk management. The study also found that managers have taken steps to improve transparency, with one third of respondents saying they now seek more independent accounting and valuations.

However, more than two-thirds said that this increased focus on transparency had helped them obtain business, as investors flock to those funds that are seen to be more open.

“The events of the past year have illustrated the direct link between operational improvements and hedge funds’ ability to attract and retain assets from investors,” said Greenwich Associates consultant Andrew McCollum.

“There’s a real change of behaviour going on, the days in which investors would entrust their money to the black box of a skilled hedge fund manager are over. In the post-crisis marketplace, investors are demanding not only transparency, but also sophisticated operational processes and infrastructures capable of managing the types of risks they’ve experienced over the past 18 months.”