The Value of Human Capital Synergies in M&A: Evidence from Global Asset Management
72 Pages Posted: 2 Aug 2015 Last revised: 21 Nov 2017
Date Written: November 20, 2017
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: Suggested Citation