This Column Is Meant to Make You Uncomfortable.

Questions must be asked about the deafening silence surrounding sexual harassment in asset management — an industry that, to outsiders, would seem absolutely ripe for Harvey Weinstein– and Matt Lauer–style abuses of power and privilege, columnist Angelo Calvello writes.

Illustration by Institutional Investor

Illustration by Institutional Investor

Questions must be asked about the deafening silence surrounding sexual harassment in asset management — an industry that, to outsiders, would seem absolutely ripe for Harvey Weinstein– and Matt Lauer–style abuses of power and privilege.

Via social media, I challenged asset allocators and consultants: “If an executive at one of your asset managers were accused of sexually harassing current or former employees, would you fire them?” I received three kinds of answers:

“We would investigate the charges by speaking directly with the firm’s senior management — and fire the manager if its explanation or actions were deemed deficient.”

“The accused is innocent until proven guilty.”

“My responsibility is to deliver the best possible returns. I have no obligation to have my investments reflect a moral code.”


Though each response is feeble in its own way, taken together they represent a typical passive attitude of denial.

Sure, there are occasional allegations of sexual harassment (most recently at Bridgewater and Fidelity), but we tend to regard these as isolated incidents — “locker room behavior” — rather than the systematic maltreatment of a group of employees. No policy is needed to deal with such one-off occurrences — at least according to those voicing such passivity.

This passivity permits us to ignore study after study showing that regardless of the industry, women are mistreated by men who have power over them.

And in general, asset management is one of the few industries not engaged in the growing national conversation on sexual harassment.

But this charade is unmasked when a female allocator discloses to me privately, “I am not sure any firm that I ask would be clean on that answer. I have seen and experienced too much myself.” Add to this a male allocator’s dispassionate comment: “We’ve come to expect this kind of behavior [i.e., sexual assault]. Misogyny is part of the business.”

The absence of widespread allegations of sexual harassment does not indicate an industry free of sin. Rather, it speaks to a culture of silence in which victims are afraid to speak of their abuse and firms pay victims for their silence and allow the guilty to go unpunished.

We must be honest and admit that asset allocators’ and consultants’ responses to my question perpetuate this culture of silence — despite these allocators and consultants having the explicit power to influence a manager’s business and culture.

When a female CIO speaking off the record tells me, “I have passed on hiring firms over the years where there has been smoke, not even waiting to see the fire,” we should see it as an acknowledgment of — but not a remedy for — the culture of harassment she has detected.

When a senior female consultant tells me that in selecting a manager, “culture and character matter” but then admits that she has never asked a single firm about its sexual harassment policy, its process for vetting claims, or any record of sexual assaults, we should recognize that for the consultant, only certain elements of culture and character truly matter.

And beyond my simple survey, we must ask more questions.

Why do we silently accept a hedge fund’s paying a female employee for her silence, then barring her from speaking about her experience and escorting her off the premises?

Why do we accept mandatory arbitration and nondisclosure agreements as standard employment apparatus when, according to the National Women’s Law Center, these tactics not only hide bad behavior in sexual harassment cases but also “isolate victims and cover up massive, widespread wrongdoing in the financial sector”?

Given the inherent power dynamic in the workplace, can a relationship between an executive and a subordinate be consensual?

Why do we think it acceptable for a female investor relations professional to be required to take male clients to strip clubs?

How many times will we invest with a venture capital manager that boasts a “bro culture”?

How can public pension funds state, “Simply put, board diversity is good for business,” and then stomach having the owner of a consulting firm humiliate a long-serving senior female executive and sole female board member?

Why do we praise asset allocators who use their position to endorse closing the gender pay gap but fail to realize that, according to Susan Antilla, a reporting fellow for the Investigative Fund at the Nation Institute, “terrible pay and harassment go hand in hand”?

And why do asset allocators calling for more women in senior positions not understand that the underrepresentation is, in a sizable number of cases, a consequence of sexual harassment, as many victims quit their jobs and leave the industry?

It is time for asset allocators and consultants to become fully aware that their actions enable — and their fees subsidize — the mistreatment of an entire class of people. They should be mindful that, unlike victims of sexual harassment and assault, they have immense power over a manager. They should be ashamed if they do not use it.

LinkedIn co-founder Reid Hoffman recently wrote, “If you stay silent [about sexual abuse], if you don’t act, then you allow this problem to perpetuate. And you send the public signal ‘We don’t care.’ . . . This behavior occurs in our industry not just because some believe it’s no big deal, but also because those who do find it unacceptable don’t do enough to actively discourage it.”

I asked an asset allocator why people don’t act. His answer was painfully simple:

“There are no awards in this business for moral courage.”