Firms’ competitive advantages are unsustainable when competitors hire their employees away to study and recreate those advantages. We document inter-firm knowledge spillovers through labor mobility in the mutual fund industry, which result in performance improvement at the recipient family. This effect intensifies when frictions hampering knowledge absorption at the recipient family are weaker and switching managers had better access to the organization processes at the originating family. Performance deterioration at the originating family, which intensifies when more money chases the newly-transferred knowledge, suggests erosion of its competitive advantage and wealth transfers across investors in the respective families.