Fraud investigation into Mayfair-based hedge fund

The founder of a London hedge fund being probed by fraud investigators today denied any wrongdoing.

The Serious Fraud Office has started an inquiry into the investment activities of Dynamic Decisions Capital Management after complaints about a flagship Cayman-based fund.

Alberto Micalizzi, who founded the Mayfair-based hedge fund five years ago, said investors would be repaid. Repayments could total £330 million.

"There is absolutely no fraud," he said. "The Financial Services Authority has not taken any action after several months. It's unfounded."

The SFO said it was investigating after receiving complaints. But Dr Micalizzi, 41, who has worked as an academic at Imperial College London and reportedly was chairman of Dynamic Decisions until February, said that he was "taken by surprise" by the investigation.

The hedge fund has been registered in the UK since 2004. Its funds are operated from the Cayman Islands, which is favoured by investors for its light tax treatment.