As the second season of the addictive Sky Atlantic hedge fund drama Billions begins, Spear’s Sophie McIntyre speaks to psychiatrist and neuroscientist Dr Tara Swart – London’s answer to Wendy Rhoades – about how to increase hedge fund performance.
In the closing episodes of Billions Season 1, hedgie Bobby Axelrod (played by Damien Lewis) makes a bad trade and turns to the firm’s in-house coach, psychologist (and sometime dominatrix) Wendy Rhoades. He, understandably, wants to know why he lost nearly $1 billion in a deal, against the guidance of his advisers.
‘This is how you manifest guilt,’ Rhoades explains, as she unpacks Axelrod’s self-punishing decision. ‘Your switchblade is removed, your wiring is exposed, your blue ones go where your red ones should, for sure. …So it's either fix it, or close yourself back up and see what happens.’
Rhoades then spends an entire night coaching Axelrod in an attempt to ‘fix him’, moulding him into a stronger psychological unit and a better decision-maker. It is not as far fetched as you might think.
Coaching culture is taking off this side of the pond, too. And the Wendy Rhoades of London is psychiatrist, neuroscientist and former MIT lecturer Dr Tara Swart. The doctor already has the likes of Google, Sony, KPMG, Linklaters and Henderson on her client list.
‘Fund managers come to me and say ''things are slipping and I don’t know why I’m not performing as well as I used to,''' says Swart. ‘There is sometimes a lot of alcohol use in this area and people have a difficulty curtailing that.’
And according to the neuroscientist, London’s fund managers also frequently suffer from the physical effects of long-term stress.
High levels of the stress hormone cortisol, common in those with long-term stress, can lead to heart disease, a reduction in brain cells or dementia-related diseases, such as Alzheimer’s. ‘High levels of cortisol causes the death of nerve cells in your brain,’ she points out. So this is a serious business.
Cortisol also erodes your immunity. ‘The stress could attack your immune system, so you could end up having a bad back or worst case scenario you might end up having heart disease.’ And there is tangible evidence that there have been more heart attacks in financial services in the last eight or nine years than were before that, says Swart.
And how well do you sleep? If you are getting less than seven hours sleep, you will not be able to ‘clean the toxins out of your brain, and people who don’t do this are more likely to get diseases such as Alzheimer’s,’ Swart also warns.
The health time bomb aside, cortisol and testosterone can affect your decision-making skills and general performance. ‘When there is uncertainty or a period you can’t control or change and cortisol levels are higher, that biases your decision making towards the risk adverse decision making,’ says Swart. ‘Or, when things are going really well, you are more likely to take good risks, but you can become overconfident. This is how a winning streak can turn into a disaster.’
This overconfidence also correlates with testosterone levels: some people find themselves swinging wildly between different types of decisions, depending on which is more dominant, the stress-induced cortisol or testosterone.
To lower cortisol levels and to create a healthy physical foundation for emotional coaching techniques, Swart suggests using nutrition, exercise, mindfulness and programmes to improve patterns of sleep, before embarking on a programme of brain training.
Once this is achieved, Swart gets very Wendy Rhoades. She begins to develop clients’ emotional awareness and agility of thinking, to raise their game.
The aim is to improve clients’ creativity, emotional intelligence, intuition and motivational awareness (you need to know what gets you going) while also making sure that they focus on the ‘physicality’ of stress above all else. ‘What I try to do is to strengthen the brain pathways for those six types of thinking,’ she explains. ‘It’s all about adding depth and richness to what else is affecting your decision making.’
Swart thinks that more and more London hedge funds will have neuroscience–based coaches on their payroll in the near future.
‘I’ve been approached by companies who were interested in my scientific background and wanted their own Wendy,’ she admits.
‘Ultimately, if you’re stressed, if there’s an issue at home or if there’s something in the past that’s stressful, it affects every single decision you make,’ Swart warns. ‘If you choose to ignore emotion then you are neglecting important data and you may not be making the right decisions’.
Stress can kill and it can ruin your performance, so invest in your very own Wendy Rhoades – you never know, you might even climb to the dizzy heights of the great Bobby Axelrod as a result.