This paper probes into an important issue of China＇s security market： how would fund managers＇ alumni networks affect the performance of the funds？ By establishing an indicator system that measures the breadth and depth of alumni networks, several conclusions are drawn. 1） Both the breadth and depth of alumni networks are positively correlated to the performance of the fundsl risk-adjusted return of the fund with the highest degree of breadth is 9.12% higher than that of the lowest degree fund. 2） Only direct and intimate alumni networks could influence the performance of funds, which we define as ＂inner circle effect＂. 3） Alumni networks facilitate sharing of private information, leading to more proactive trading and more unobserved actions. 4） Alumni networks have different impact on buying and selling decisions. Concerted actions could only be observed when buying decisions are made other than selling, which possibly indicates that good news spread efficiently among alumni while bad news is hardly shared. This paper signifies the importance of direct relational networks to China＇s capital market and casts insights into the understanding of information transfer mechanisms and the economic effects of relational networks in China＇s capital market.