Investors are failing to ask fund managers about sexual misconduct claims and discovering such evidence wouldn’t necessarily deter them from committing capital to firms, an industry group found.

In its first survey focusing on #MeToo risk in the fund industry, the Investment Management Due Diligence Association found that almost 90 percent of respondents do not specifically inquire about sexual harassment when interviewing prospective managers to oversee assets.

Seventy-six percent of investors said they’d still consider investing with a fund manager even if they discovered issues with sexual harassment, though 55 percent said they’d seek further information before making a decision. The organization surveyed 78 institutional investors -- including endowments, pensions, insurance companies, private banks and fund of funds -- in February and will publish the results Wednesday.

“Seeing that people would actually invest in someone that they found a problem with, that was really shocking,” IMDDA executive director Andrew Borowiec said in an interview. The organization, founded in 2015, seeks to educate investors on conducting better due diligence. “Not only is harassment ethically and morally an issue, but from a pure business and reputational standpoint it can cause you a lot of difficulty as an investor, particularly if you’re a public pension.”

While the #MeToo movement has swept Hollywood and Silicon Valley, it’s been slower to reach Wall Street. Several cases have recently come to light such as an employee lawsuit accusing Steve Cohen’s Point72 Asset Management of discriminating against women and D. E. Shaw’s dismissal of a longtime longtime fund manager for violating company standards.

A majority of respondents said they ask managers about settlements and non-disclosure agreements and a similar number say they query managers about culture broadly. But the results suggest that allocators haven’t paid attention to sexual misconduct.

“We need to ask tougher questions -- questions not just about culture, but rather the DNA of a company as it relates to sexual harassment,” the organization said in the report.

Four in five investors said they didn’t query publicly available U.S. Equal Employment Opportunity Commission or Human Rights Commission data when conducting diligence. Many allocators didn’t know until recently that this information was accessible, Borowiec said.

Even investors who do seek information on the history of sexual misconduct complaints at fund managers sometimes fall short of a thorough investigation, the report said.

One in three firms reported not using an outside company to conduct background checks, and a plurality -– 42 percent –- only examined senior management. Thirteen percent said they didn’t do background checks at all.

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