Key Takeaways
- • Jim Bisenius, founder and CEO of Portland-based Common Sense Investment Management, was arrested on August 29, 2013, in a prostitution sting in Tigard, Oregon, alongside eight other men.
- • Common Sense Investment Management operates as a fund of funds with $3.2 billion under management as of the arrest date, down from $3.9 billion the prior year and $4.2 billion in 2011, ranking as the 46th largest fund of funds globally.
- • The Common Sense Long Biased Offshore fund delivered 8.3% returns year-to-date through July 31, 2013, outperforming the InvestHedge Composite Index benchmark of 5.3%, though the net annualized return since May 2008 stands at only 1.8%.
- • Institutional investors in the fund include the Cincinnati Retirement System, Oklahoma Municipal Employees Retirement Fund, Fresno County Employees Retirement Association, and the Illinois Student Assistance Commission, with the Oklahoma fund's $30 million redemption underway—reportedly unrelated to the arrest.
- • The arrest has triggered significant investor outflows from the fund following the reputational damage to the firm's leadership.
Summary
Jim Bisenius, founder and chief executive officer of Common Sense Investment Management, a Portland-based fund of funds, was arrested on August 29, 2013, in an undercover prostitution enforcement operation in Tigard, Oregon. Bisenius was one of nine men arrested in the sting. Bisenius founded Common Sense Investment Management in 1991 and has served as the firm's chief investment officer.
At the time of his arrest, Common Sense Investment Management managed $3.2 billion in assets, representing a decline from $3.9 billion the previous year and $4.2 billion in 2011. The firm ranked as the 46th largest fund of funds globally as of December 31, 2012, according to InvestHedge rankings. The Common Sense Long Biased Offshore fund posted a year-to-date return of 8.3% through July 31, 2013, exceeding the InvestHedge Composite Index benchmark return of 5.3%. However, since the University of Toledo Foundation first invested in May 2008, the fund has delivered a net annualized return of only 1.8%.
The fund's investor base includes major institutional clients drawn primarily from the public pension sector. An investigation by the Portland Business Journal identified investors including the Cincinnati Retirement System, Oklahoma Municipal Employees Retirement Fund, Fresno County Employees Retirement Association, and the Illinois Student Assistance Commission. The Oklahoma Municipal Employees Retirement Fund, managing approximately $30 million with the firm, initiated redemptions; however, according to the fund's chief executive officer Cindy Shattuck, the redemption decision was made prior to Bisenius's arrest and was unrelated to the legal matter.
The arrest has precipitated significant investor departures from the firm as institutional clients respond to the reputational impact on the fund's leadership.
At the time of his arrest, Common Sense Investment Management managed $3.2 billion in assets, representing a decline from $3.9 billion the previous year and $4.2 billion in 2011. The firm ranked as the 46th largest fund of funds globally as of December 31, 2012, according to InvestHedge rankings. The Common Sense Long Biased Offshore fund posted a year-to-date return of 8.3% through July 31, 2013, exceeding the InvestHedge Composite Index benchmark return of 5.3%. However, since the University of Toledo Foundation first invested in May 2008, the fund has delivered a net annualized return of only 1.8%.
The fund's investor base includes major institutional clients drawn primarily from the public pension sector. An investigation by the Portland Business Journal identified investors including the Cincinnati Retirement System, Oklahoma Municipal Employees Retirement Fund, Fresno County Employees Retirement Association, and the Illinois Student Assistance Commission. The Oklahoma Municipal Employees Retirement Fund, managing approximately $30 million with the firm, initiated redemptions; however, according to the fund's chief executive officer Cindy Shattuck, the redemption decision was made prior to Bisenius's arrest and was unrelated to the legal matter.
The arrest has precipitated significant investor departures from the firm as institutional clients respond to the reputational impact on the fund's leadership.
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