Your Former Employees Matter: Private Equity Firms and Their Financial Advisors

Review of Finance, Forthcoming

Posted: 28 Jun 2008 Last revised: 5 Feb 2013

Linus Siming

Audencia Business School

Date Written: February 1, 2013

Abstract

This paper shows that former investment bankers become important clients for their previous employers and also provide access to profitable business opportunities to their new private equity employers through their previous employment networks. I observe 1,326 individuals directly involved in 1,285 transactions, of whom a large majority have changed their occupation from financial advisor to private equity professional. The social networks arising from these labor market movements affect private equity firms’ choices of financial advisors, as well as the sourcing, pricing, and performance of deals.

Keywords: Social networks, private equity, acquisitions

JEL Classification: G10, G24, G34

Suggested Citation

Siming, Linus, Your Former Employees Matter: Private Equity Firms and Their Financial Advisors (February 1, 2013). Review of Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1151744 or http://dx.doi.org/10.2139/ssrn.1151744

Linus Siming (Contact Author)

Audencia Business School

8 route de la Jonelière, BP 31222
Nantes Cedex 3, Cedex 3 44312
France

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