Portus Alternative Asset Management Inc. moved yesterday to reassure investors as provincial securities regulators continue their investigation of the hedge fund firm.

Portus is in ongoing discussions with the Ontario Securities Commission and other provincial securities regulators that have issued temporary orders to stop accepting new money from clients.

In a statement, Portus said it “has invested investors’ money in such a way that if they hold their investment to maturity, they will receive 100% of their principal, plus the upside return linked to an actively managed fund of hedge funds.”

“The only way investors face any loss of their principal is by withdrawing funds from their investment account prior to the maturity date of the bank note. This bank note is issued and 100% backed by one of the world’s major financial institutions. Naturally, investors are encouraged not to withdraw funds,” Portus said.

Earlier this week, Portus suspended any withdrawals from managed accounts and the Market Neutral Preservation Fund.

Portus said it “has a responsibility to protect the value of the investments for the large majority of investors who wish to hold their investments to maturity. This suspension does not affect pre-existing systematic withdrawals from RRIF and other registered plans.”

The firm added it continues to work with regulators toward resolving outstanding issues.

http://www.newswire.ca/en/releases/archive/February2005/09/c2466.html