The Value of Human Capital Synergies in M&A: Evidence from Global Asset Management

66 Pages Posted: 2 Aug 2015 Last revised: 21 Nov 2017

Mancy Luo

Erasmus University - Rotterdam School of Management

Alberto Manconi

Bocconi University - Department of Finance

David Schumacher

McGill University

Date Written: November 20, 2017

Abstract

We use mergers in the global asset management industry to study the value human capital synergies. Following mergers, the average fund rebalances towards new investment areas, creating $18 million in additional value. We relate these synergies to improvements in internal labor markets: synergies are strongest for funds with managerial changes and in mergers that increase the size and complementarity of human capital expertise. This allows for a better matching of human to investment capital and points to a central benefit of mergers: the added flexibility to create value via discretionary increases in the size and quality of internal labor markets.

Keywords: Asset Management Mergers, Human Capital Synergies, Portfolio Choice, Performance

JEL Classification: G15, G23.

Suggested Citation

Luo, Mancy and Manconi, Alberto and Schumacher, David, The Value of Human Capital Synergies in M&A: Evidence from Global Asset Management (November 20, 2017). Available at SSRN: https://ssrn.com/abstract=2638658 or http://dx.doi.org/10.2139/ssrn.2638658

Mancy Luo

Erasmus University - Rotterdam School of Management ( email )

Burgemeester Oudlaan 50,
Mandeville Building, Room T08-47,
Rotterdam, 3062PA
Netherlands

HOME PAGE: http://sites.google.com/site/mancyluofinance/

Alberto Manconi

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

HOME PAGE: http://mypage.unibocconi.eu/albertomanconi/

David Schumacher (Contact Author)

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada
5143984778 (Phone)

HOME PAGE: http://www.davidschumacher.info

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