NEW YORK, June 27, 2018 /PRNewswire/ -- Institutional investors are beginning to ask more questions about sexual harassment incidents and settlements at their underlying asset managers, and brand name managers are taking swift action – including termination – against employees who have shown a history of poor behavior, according to Andrew Borowiec, Executive Director of the Investment Management Due Diligence Association (IMDDA).
These developments coincide with the release of the IMMDA's inaugural survey on the state of sexual harassment in the investment management industry last month, indicating that the #MeToo movement is having an impact beyond the media and entertainment industries.
"When we commissioned the survey in January, only 11 percent of investor respondents were specifically inquiring about sexual harassment when performing due diligence," said Borowiec. "If we were to conduct the survey today, we would expect that number to be higher. Managers need to realize that these questions are coming and should be open to discussing any issues that might have occurred in the past."
As has been the case in previous eras of industry reform, large pension funds are leading the way, including the $355 billion California Public Employees Retirement System (CalPERS) and the $56 billion Los Angeles County Employee Retirement System (LACERA). These two investors are pushing for more disclosure on sexual harassment incidents from their underlying managers.
Investors want to avoid the business risk of being associated with an asset manager plagued with sexual harassment problems and the potential for departures, such as fund managers with responsibility for managing their investments, Borowiec told the Financial Times earlier this month.
This and many other due diligence related topics will be presented at the organization's training sessions in the second half of 2018. To view the full class schedule, click here.
In response to member feedback and given the sensitive nature of this subject, the IMDDA has established a set of best practices for how investors should incorporate sexual harassment inquiries into their due diligence practices, including:
- What exact information investors should look for
- Where to find relevant information in the public domain
- How to examine a manager's HR practices
- If incidents are found, how to assess accuracy of claims and future risk
"We are pleased with the progress that has been made thus far and look forward to further affecting positive change in the industry. But we still have a long way to go," concluded Borowiec.
Founded in 2015, the Investment Management Due Diligence Association® (IMDDA) is the only international investor-centric organization dedicated exclusively to due diligence professionals. The IMDDA's mission is to work with the investment management community to set the standards for due diligence globally. Through its professionals-only membership, seminars, web site, customized educational training and in-development due diligence certification program, the IMDDA provides a forum for interaction among peers to share ideas and learn from each other while developing extensive curriculum and standards for due diligence professionals.
The IMDDA focuses on educating individuals on best practices for conducting due diligence on hedge funds, private equity funds, venture capital funds, and mergers & acquisitions. IMDDA operates in North America, United Kingdom, Singapore and Hong Kong. Members include representatives from financial institutions, regulatory bodies, law enforcement agencies and industry sectors.
SOURCE Investment Management Due Diligence Association