Software to get heads in gear for the best trades

WERE you alone in a small office after a breakfast of muesli or in an open-plan space nursing a hangover when you made that brilliant trade?

Some of the world’s leading hedge funds are asking these questions as they turn to psychology to delve into the minds of top fund managers to boost performance and profits.

Man Group, the world’s biggest publicly traded hedge fund, is among early adopters of a software program that aims to create the perfect environment to help fund managers produce their best trades.

Simon Savage, who runs funds for GLG Partners, a division of Man, said: “This is a groundbreaking development, which we hope will give us that extra edge in an industry that is becoming more and more competitive. Sportsmen and women have used these techniques for years to give themselves a competitive advantage and it makes sense to do it in the office as well.”

Savage thinks the technology will revolutionise the way people work and perform, similar to the way diet, psychology and preparation have played a big part in producing the best football teams.

Another leading investment group in the US is also taking on the technology.

The software, developed by Clare Flynn Levy, a star fund manager at Morgan Grenfell in the 1990s, enables fund managers to key in a variety of information, from the time a trade was made to the mood the person was in when they made it.

Lifestyle factors, such as diet and the amount of exercise a fund manager has, can also be logged.

The technology, launched this week, has been developed by Essentia Analytics with the help of psychology and human behaviour experts as well as computer and software specialists.

It aims to align performance with skill and as far as possible eradicate luck and chance by working out the circumstances surrounding the best and worst trades. This, in theory, should help fund managers repeat successes and avoid failures.

Flynn Levy said: “Emotions and mood play a big part in performance. As a fund manager, I used to work over the summer until I realised I was better off taking a break and coming back refreshed and motivated.”— © The Financial Times Comment on this: write to letters@businesstimes.co.za or SMS us at 33971 www.timeslive.co.za