The Federal Bureau of Investigation has raided three US hedge fund managers - Diamondback Capital Management, Level Global Investors and Loch Capital Management - in connection with an insider trading investigation.

FBI spokesperson Richard Kolko said the agency had executed court-authorised federal search warrants to gather evidence in an ongoing investigation. He declined to provide additional information.

Level Global and Diamondback confirmed the FBI had conducted searches of their offices. They said they are co-operating with the investigation. Executives at Loch could not be reached for comment.

The raids are thought to be part of a broad investigation into insider trading led by the office of Preet Bharara, the US attorney for the Southern District of New York.

The hedge funds raided by the FBI manage a combined total of around $10 billion, primarily in equity funds with a focus on technology stocks.

Diamondback Capital was established in 2005 by Larry Sapansky, Chad Loweth and Rich Schimel, all former traders at Steve Cohen's SAC Capital. Loweth is said to have left Diamondback in May of this year.

Last year Diamondback settled a Securities and Exchange Commission (SEC) charge relating to short-selling rule violations dating back to 2005. The company paid a fine of $47,000 and settled without admitting or denying the charges.

Diamondback had assets under management (AUM) of $5.3 billion in May 2010, according to regulatory filings.

Level Global was founded in 2003 by David Ganek, a former equity trader at SAC Capital, and Anthony Chiasson, a former Salomon Brothers analyst. It is reported to manage around $4 billion in long/short equity funds, predominantly trading technology and financial stocks.

Boston-based Loch was established in 2002 by brothers Todd and Timothy McSweeney. Loch specialises in technology investments and had $750 million in AUM in March 2010, according to regulatory filings.

Loch's funds reportedly suffered redemptions early this year due to links between the McSweeney brothers and Steve Fortuna, co-founder of S2 Capital Management. Fortuna pleaded guilty to insider trading in November 2009 and is a key witness in the case against Galleon Group founder Raj Rajaratnam.

Loch's AUM is said to have been above $2 billion at its peak.

Bharara and his team at the US attorney's office in New York are said to be examining trading activity at scores of banks, proprietary trading shops and hedge funds as part of their investigation.

Bharara charged Yves Benhamou, a French doctor, on November 3 with passing on insider information to a portfolio manager at FrontPoint Partners.

Chip Skowron, the lead portfolio manger of FrontPoint's healthcare funds and a former SAC analyst, has been suspended by FrontPoint pending the outcome of the case. FrontPoint is said to be closing its healthcare funds and returning money to investors.

Bharara is also responsible for the prosecution of Galleon Group founder Raj Rajaratnam on insider trading charges.