James A. Bisenius, the founder and CEO of the nearly $4 billion Portland hedge fund Common Sense Investment Management, was arrested last week in a prostitution sting.
The firm is by far the largest money manager in Oregon.
Bisenius was one of nine people arrested in the sting at a Tigard-area hotel.
Common Sense Investment Management President Dean Derrah issued the following statement:
"For more than two decades, Common Sense Investment Management has brought superior risk- adjusted returns to our investors and clients. (The firm's) success is about a team of committed and driven investment professionals; not one individual. Jim Bisenius’ recent personal transgression bears no reflection on this outstanding team of professionals or the quality of portfolio management at (Common Sense).
Going forward, the firm’s partners have decided that Jim will remain in his role as chief executive officer and chief investment officer and he will deal with this recent event as the personal matter that it is. Our investment process and decision-making will continue to be made by our investment committee, which is comprised of our four portfolio managers, director of operational due diligence, director of risk management, Jim as CEO/CIO, and me. All management decisions continue to be made by the management team.
We look forward to building on (Common Sense Investment Management's) successful 22‐year track record and creating value for our investors."
The firm plans to send a letter from Bisenius to investors today, according to a source with knowledge of the firm's workings.
Common Sense technically is a fund of hedge funds, which means it raises money from investors and then parcels the money out to a variety of hedge funds. Hedge funds are investment vehicles for the wealthy and large investors like pension funds and insurance companies.
Common Sense runs several funds. Its flagship funds — Common Sense Partners and Common Sense Long-Biased — primarily take long and short positions in the stock market, a relatively straightforward strategy by hedge fund standards.
The firm has historically outperformed its benchmarks, but its performance appears to be slipping. Its assets under management are down to $3.8 billion from a high of $4.3 billion, according to annual reports filed with the Securities and Exchange Commission.
Common Sense's investors include the pension fund for employees of the city of Fresno, Calif. In April, the fund posted a memo on its website about putting Common Sense "on watch" because it was underperforming its benchmarks.
The memo also noted the resignation of two key Common Sense employees — portfolio managers Jonathan McGowan and Scott Kelly.
The Business Journal reported on the firm in-depth last year.
The Portland Business Journal is a KATU News partner.