Common Sense Becomes Family Office After Prostitution Bust

Jan 16 2014 | 1:08pm ET

Another scandal-tarred hedge fund is becoming a family office.

Common Sense Investment Management will return what's left of its clients assets and will manage firm founders' James and Janet Bisenius' wealth. Investors have been fleeing the Portland, Ore.-based fund of hedge funds in the wake of James Bisenius' arrest in a prostitution bust in August.

Common Sense had about $3.2 billion in assets at that time, but was left with less than $150 million at the end of the year.

According to the Portland Business Journal, Common Sense cut "generous" severance checks to employees laid off after the decision, and has worked to find new jobs in the hedge fund industry for those being let go. Common Sense employed about 30 people prior to the scandal; it is unclear how many will remain, or whether the firm will retain the Common Sense name.

Common Sense initially sought to distance itself from Bisenius' arrest. While it said he would be retained as CEO and chief investment officer, the firm insisted that Bisenius' "personal transgression bears no reflection on this outstanding team of professionals or the quality of portfolio management." But some clients questioned that quality, noting that the firm's returns had sagged and that two top portfolio managers left the firm last year.

Bisenius was arrested in a Portland suburb after responding to an online prostitution ad—one posted by the police.

Common Sense's shift to a family-office structure follows a similar move by SAC Capital Advisors, which is returning all outside capital following its guilty plea to insider-trading charges.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.