Finding Your Calling: Matching Skills with Jobs in the Mutual Fund Industry

To best utilize labor, companies need to match employees’ skills with jobs that best fit those skills. Exploiting unique features of the mutual fund industry, we identify instances when this matching happens for fund managers and study its consequences. When fund managers are matched, they deliver a significantly higher risk-adjusted performance. Fund companies use this information to maximize company value by increasing assets under the management of these managers (i.e., assigning them to more and larger funds) and by collecting higher fees from these managers’ funds. In addition, they make the expertise of these managers available to other managers of the fund company.

This paper was accepted by Lukas Schmid, finance.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.02805.