New ‘Predatory Behavior Index’ Shows VC, Equity Firms Accused of Sexual Misconduct Return Lower Rates

Arlington, Va.: Researchers from George Mason University, University of California, Berkeley, and the Harvard Business School for the first time have studied reported instances of sexually predatory and discriminatory behavior at venture capital and private equity firms going back more than two decades. The study compared fund performance against comparable funds where no instances of harassment or discrimination had been reported.

The findings could be important for business leaders: Funds with instances of discrimination or harassment behavior have an average 15 percent lower return over a typical 10-year fund lifespan.

“This research has the potential to change the definition of responsibility for institutional investors,” said co-author Phillip Auerswald. “The implications for asset allocation could be significant.”

The researchers developed the Predatory Behavior Index (PBI) that measures 10 different discriminatory and harassing behaviors that have the most common occurrences in the private equity and venture capital industry. The behaviors—ranging from enabling discriminatory behavior to rape and assault—are ranked according to severity. The authors will update the index and track the performance of funds on an ongoing basis.

The research can be found in the working paper, Predators in the Board Room? Relating Sexually Predatory, Discriminatory Behavior to Private Capital Performance, written by Imogen Rose Smith, Investment Fellow with the University of California; Phillip Auerswald, Associate Professor of Public Policy at the Schar School of Policy and Government at George Mason; and Gitanjali Swamy, Research Fellow and Director Special Projects at the Private Capital Research Institute at Harvard Business School.

“Investors can now see that these inappropriate behaviors have an impact on financial results,” said Swamy. “Addressing this type of behavior is not just a moral imperative, it is close to a fiduciary duty for investors.”

The working paper can be found at the Schar School of Policy and Government here. For more information about the research contact Gitanjali Swamy at or 617-407-5667.

About the Schar School

The Schar School of Policy and Government is one of the 10 schools and colleges of George Mason University with approximately 2,000 students, 80 full-time faculty members, and 13 degree programs offered on Mason’s campuses in Fairfax and Arlington, Va. Among the degree programs are government and international politics, public policy, public administration, international security, and international commerce and policy. The Schar School prepares undergraduate and graduate students to be leaders and managers who solve problems and advance the public good in all sectors and levels of government—in the United States and throughout the world. For more, contact Communications Manager Buzz McClain at

About George Mason University

George Mason is Virginia’s largest public research university. Located near Washington, D.C., Mason enrolls nearly 34,000 students from 130 countries and all 50 states. Mason has grown rapidly over the last half-century and is recognized for its innovation and entrepreneurship, remarkable diversity and commitment to accessibility.