Manulife Financial Corp. is giving its clients who were referred to Portus Alternative Asset Management Inc. three choices for the recovery of 100% of the principal invested.

The company said Thursday that clients of advisors licensed by subsidiary Manulife Securities International Ltd. will be offered the choice of exchanging their Portus investment for either

  • a principal-protected note referenced to a portfolio of mutual funds managed by Manulife;
  • a Manulife Guaranteed Investment Certificate or;
  • a cash payment equal to 100% of their principal invested.



“We are following through with the commitment that we made to our clients and, in doing so, are presenting to them several alternatives from which to choose,” Manulife president and CEO Dominic D’Alessandro, said in a statement. “We hope that these options provide our clients with peace-of-mind, despite the fact that the investigation into Portus and resulting legal actions are far from complete.”

Manulife promised last month it would guarantee the recovery of all of principal invested by MSIL clients in Portus, and committed to updating MSIL clients by the end of March.

In a letter to clients, D’Alessandro noted that two of the three options offer the opportunity to reinvest “on favourable terms in products created by Manulife specifically for MSIL clients referred to Portus and which will not be made available to any other clients.”

Manulife has also agreed to credit clients with any excess return from the ultimate net realization of any of the Portus funds transferred to Manulife.

Portus had its assets effectively frozen by regulators in February pending an investigation of the Toronto-based hedge-fund manager’s sales and compliance practices.

In early March, the Ontario Securities Commission placed Portus and BancNote Corp. in court-appointed receivership under KPMG Inc. Portus is attempting to bring a motion seeking to terminate the receivership against it.

According to a class-action suit filed against Manulife by investors, the insurer earned $10 million in fees through a referral agreement that directed $240 million worth of clients’ capital to Portus.