Forty-five Bermuda-based investors pumped almost $1.5 million dollars into a collapsed Canadian hedge fund that is now under investigation in Canada.

Until regulators shut it down in February, Portus Alternative Asset Management was one of the fastest-growing hedge funds in Canada, raising in excess of $800 million through its various products from almost 26,000 customer accounts.

While the total book value from the 45 Bermuda investors is nowhere near the $725 million invested by 24,519 Canadians, Bermuda?s book value leads foreign investments in Portus Alternative Asset Management, according to court documents.

Portus was forced into receivership last March by the Ontario Securities Commission and has been the subject of an RCMP criminal investigation since July.

The court appointed receiver KPMG is attempting to untangle the transactions in the now-insolvent hedge fund.

In a report issued last week, KPMG said Portus managers skimmed roughly $90 million in undisclosed fees and never followed the stated investment strategy of buying Canadian securities. Last week, one official said the money flows had little resemblance to the investment plan set out by the company and were more of a ?classic Ponzi scheme?.

KPMG alleged in its most recent report that no shares were ever bought and the money sent to brokerages including the Cayman arm of Bermuda-based Lines Overseas Management were ?commingled at various times with monies? from other Portus series. The scheme involved more than 130 Portus bank and investment accounts located in Canada, the Cayman Islands and the Turks and Caicos.

The funds which flowed through the LOM Cayman accounts have now been accounted for, LOM said in a statement last week.

To hasten the recovery of investor funds, KPMG intends to ask the court to declare Portus bankrupt.

KPMG said bankruptcy could make it easier to liquidate investments and distribute all recovered assets to shareholders. KPMG said it would be next to impossible to track individual investor accounts because Portus co-mingled client funds from every product.