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

Luo, Mancy; Manconi, Alberto; Schumacher, David

doi:10.2139/ssrn.2638658

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

66 Pages Posted: 2 Aug 2015 Last revised: 23 Sep 2018

See all articles by Mancy Luo

Mancy Luo

Erasmus University - Rotterdam School of Management

Alberto Manconi

Bocconi University - Department of Finance; Centre for Economic Policy Research (CEPR)

David Schumacher

McGill University

Date Written: September 7, 2018

Abstract

We use mergers in the global asset management industry to examine the relationship between firm size and fund performance and to study the value of human capital synergies. We document significant changes in managerial turnover, portfolio differentiation, and fund performance in the post-merger period, especially after mergers that increase the size and complementarity of human capital. The re-allocation of human capital following a merger is associated with a better matching of human to investment capital and creates $4.2 million additional value per year per fund. Improvements in internal labor markets appear to be a central benefit of asset management mergers.

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

JEL Classification: G15, G23

Suggested Citation: Suggested Citation

Luo, Mancy and Manconi, Alberto and Schumacher, David, The Value of Human Capital Synergies in M&A: Evidence from Global Asset Management (September 7, 2018). Available at SSRN: https://ssrn.com/abstract=2638658 or http://dx.doi.org/10.2139/ssrn.2638658