Britain's financial regulator on Wednesday defended its work as it revealed a two-year probe of a hedge fund founded by Crispin Odey, at the centre of sexual assault allegations.

The Financial Conduct Authority "has ongoing investigations into both Mr Crispin Odey and Odey Asset Management (OAM)", FCA chief executive Nikhil Rathi wrote to British lawmakers.

The watchdog revealed it had opened investigations into the group in mid-2021, and stressed its evolving nature.

"Our supervision of OAM... has been intensive," the regulator's letter added.

The current scope is examining whether Odey is a "fit and proper person" to work in financial services, Rathi said in a letter to parliament's Treasury Select Committee, which requested an update.

The FCA opened the probe two years ago to look at allegations that Odey "dismissed OAM's executive committee for an improper purpose", Rathi added in the letter dated Monday and published Wednesday.

The Financial Times (FT) newspaper last month published a series of allegations of sexual harassment or misconduct by Odey, which he denies.

The FCA on Wednesday said its probe was "not intended as a replacement for, or alternative to, a police investigation or criminal prosecution".

Following the FT allegations, the OAM last month begun to transfer activities to other firms.

Its founder has been accused of sexual assault against eight women, according to the business daily.

Odey, a vocal Brexit supporter and Conservative party donor, has meanwhile been ousted from the group.

The FCA has restricted OAM's activities to facilitate an orderly breakup of the hedge fund following its rapid collapse.

Odey, 64, is also well known for making huge sums from betting heavily against the British pound and UK government bonds in recent years.