Sep. 4, 2013 at 4:58 PM ET
The founder of a hedge fund with more than $3.2 billion under management was arrested in a police sting operation to crack down on prostitution in an Oregon town, according to the police.
Jim Bisenius, who started Portland-based Common Sense Investment Management in 1991, was arrested last Thursday, along with eight other men in a local hotel, a spokesman for the Tigard, Oregon police said.
Bisenius was picked up by police in a sting operation in which the police placed advertisements for prostitution services on websites, which was first reported in the local media. He was held in the Washington County jail.
"We placed an online ad and within the first four hours we had arrested seven people," he said. "Our decoy officer was getting phone calls almost immediately."
The goal of the police operation was to "send a strong message that Tigard is not the place to conduct this type of activity," the spokesman said.
Common Sense Investment Management is a fund of funds with $3.2 billion under management, down from $3.9 billion the year prior and $4.2 billion in 2011. The Common Sense Long Biased Offshore fund is up 8.3 percent this year through July 31, according to a report from The University of Toledo Foundation, which has $5.85 million with Bisenius' firm.
Common Sense was the 46th largest fund of funds globally as of December 31, according to ranking by InvestHedge. Blackstone Alternative Asset Management is the largest, managing $44.81 billion at year end.
An report by the Portland Business Journal found that investors in Common Sense's funds include the Cincinnati Retirement System, the Oklahoma Municipal Employees Retirement fund, the Fresno County Employees Retirement Association, the Illinois Student Assistance Commission, and the Los Angeles Fire and Police Pensions fund.
The Oklahoma Municipal Employees Retirement fund said it was aware of the situation and is redeeming its approximately $30 million investment. The decision, however, was made earlier and is unrelated to Bisenius' arrest, according to pension director and chief executive officer Cindy Shattuck. Other pensions did not immediately respond to requests for comment,
Common Sense Investment Management did not immediately have a statement and Bisenius could not be reached directly by CNBC.
But Business Insider reported it had received a statement from Common Sense, in which the fund said its partners had decided Bisenius would remain as Chief Executive Officer and Chief Investment Officer and "he will deal with this recent event as the personal matter that it is.
"Jim Bisenius' recent personal transgression bears no reflection on this outstanding team of professionals or the quality of portfolio management at CSIM," the statement said.
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