Updated, 7:11 p.m. to provide details on the ownership of Common Sense. |
Common Sense Investment Management, a $2.9 billion fund of funds based in Oregon, sought to distance itself on Wednesday from a prostitution scandal involving its chief executive.
James A. Bisenius, the chief executive and chief investment officer at Common Sense, was among nine men arrested last week on charges of patronizing prostitutes as part of a sting operation by the police in Tigard, Ore.
Common Sense said Mr. Bisenius’s “recent personal transgressions bear no reflection on this outstanding team of professionals or the quality of the portfolio management.”
The arrest, first reported by The Oregonian, has thrust the usually low-profile Common Sense into the media spotlight.
Common Sense, which was founded in 1991 and is based in Portland, invests money in hedge funds on behalf of endowments and state and corporate pension funds. Its clients include the Cincinnati Retirement Fund, the Oklahoma Municipal Retirement Fund and the Fresno County Employees’ Retirement Association.
Janet L. Bisenius, Mr. Bisenius’s wife, has majority control of Common Sense, according to a filing made to the Securities and Exchange Commission. Mr. Bisenius has 10 percent to 25 percent control, along with a firm in Portland called BFT CSIM L.L.C. Dean R. Derrah, the president, and Craig P. Stuvland, a senior partner, each have 5 percent to 10 percent control.
Mr. Bisenius will keep both his roles and “will deal with this recent event as the personal matter that it is,” the fund said in a statement. It declined to comment further.
But several industry insiders, who spoke on the condition of anonymity because they did not want to damage any relationships, highlighted the potential harm the news could have on the fund’s reputation. The hedge fund industry is notoriously media shy and Common Sense has managed to stay out of the news for more than two decades since it was founded.
“It’s just a distraction,” said Charles T. Cassidy of Cambridge Associates, which acts as a consultant for more than 900 investors with $3 trillion in overall assets.
“Your goal is always to not have your investment manager in the news for things outside of their day job. Whether it is him getting arrested for prostitution or even a high-profile divorce — it’s not good news and it’s distracting,” he added.
Mr. Bisenius was arrested about 8:45 p.m. last Thursday at a hotel in Tigard after responding to an ad soliciting sex, said Jim Wolf, a spokesman for the Tigard police. He was charged with a Class A misdemeanor, which carries a penalty of up to one year in jail and as much as $5,000 in fines, Mr. Wolf said.
It was the second sting operation by the Tigard police this year and is part of the department’s response “to concerns and frustrations expressed from various businesses — hotels being most impacted — regarding suspicions of prostitution,” he said.
A date has not been set for Mr. Bisenius’s court hearing. He could not be reached for comment.