(Bloomberg) -- Hedge fund manager Marshall Wace and Credit Suisse Group AG have scaled back their relationship following the Archegos Capital Management implosion, according to people with knowledge of the matter.

The Archegos saga has prompted Credit Suisse to reduce its risk appetite at its prime brokerage. Marshall Wace, in turn, has become concerned about the risk of dealing with the Swiss bank, said one of the people, who asked not to be identified as the information is private.

The unraveling of Bill Hwang’s family office saddled Credit Suisse with $5.5 billion in losses, prompting it to announce a plan on Thursday to cut lending to hedge funds by a third.

Marshall Wace has been shifting business from Credit Suisse to some U.S. banks, the person said.

It wasn’t alone. PAG counts Credit Suisse as a prime broker to at least one of its funds, according to a regulatory filing. The Hong Kong-based manager which oversees about $40 billion in private equity, real estate and hedge funds also moved some of the business elsewhere, said a person with knowledge of the matter.

A spokesman for London-based Marshall Wace, which oversees about $55 billion, declined to comment. As did a Hong Kong-based PAG spokesman. A Credit Suisse spokeswoman declined to comment.

Prime brokers lend cash and securities to hedge funds, settle their trades and advise them on issues such as regulatory compliance and risk management. Hedge funds rarely completely sever such ties given that the relationships take time to cultivate. Instead, they tend to move around trades and assets left with prime brokers, after reassessing risks or to obtain better terms.

Marshall Wace listed Credit Suisse as a prime broker, alongside Barclays Bank Plc, Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America-Merrill Lynch, Morgan Stanley and UBS Group AG, for its main $21 billion Eureka hedge fund in an investor letter sent earlier this month and seen by Bloomberg.

Marshall Wace continues to deal with a diverse roster of prime brokers, said a person with knowledge of the firm.

Writing in the monthly newsletter, Marshall Wace co-founder Paul Marshall lambasted Archegos as “running too much money with poor risk management,” deceiving prime brokers and the market by disguising positions through swap contracts and amassing “completely outsized positions” in a narrow list of stocks. He predicted prime brokers will improve risk management after they paid the price for “extending so much risk” to the firm.

The Archegos episode may drive some banks to abandon the business of servicing hedge funds, handing even more power over their trading clients to the biggest Wall Street firms, Man Group Plc Chief Investment Officer Sandy Rattray said in an interview this week.

(Updates with PAG moving some of the business away in fifth paragraph)

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