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SFO launches probe into Dynamic hedge fund

THE Serious Fraud Office has launched a criminal investigation into Dynamic Decisions Capital Management, a Mayfair-based hedge fund.<br /><br />Dynamic Decisions&rsquo; flagship Growth Premium Master fund went into liquidation in May amid claims its net asset value had plummeted from $550m (&pound;332.9m) to $20m.<br /><br />The SFO said it was looking into the investment activities of the business before it identifies &ldquo;whether there has been any act of dishonesty&rdquo;.<br /><br />It is understood some investors have lost substantial amounts.<br /><br />Dynamic Decisions was set up in 2005 by Italian professor Alberto Micalizzi.<br /><br />Last night a trader who worked on the fund, Paulo Belvederesi, told City A.M.: &ldquo;When I left in January 2008 everything was normal. But they leveraged the portfolio twice, so it was effectively 200 per cent exposed to the market.&rdquo;<br /><br />In a letter to clients in February, Micalizzi said 55 per cent of the portfolio had been moved out of equities and into fixed income securities.<br /><br />The FSA began investigating in March after major shareholders Strathmore Capital and Cadogan Management demanded liquidation.