The hedge fund industry is facing an existential crisis. It is nearing a fifth consecutive year of underperforming the S&P 500 index, coming under pressure to justify its high fees and fighting off competition from low-cost alternatives. Improvements in technology and better access to information have levelled the playing field.

Against this backdrop, managers are exploring a new frontier: behavioural finance. They are becoming introspective, attempting to get into the minds and psyches of the traders and key decision makers who generate their profits. Buoyed by the greater acceptance of social, cognitive and emotional factors in the study of financial markets in the aftermath of the financial crisis, and boosted by cheap and efficient ways of harvesting data, hedge fund managers are turning to specialist coaches.