Want to make it to final rounds at a hedge fund? Then you'll need to know what’s the next letter in the following alphabet sequence: C A R R?

A growing number of established hedge funds are using “assessment” questions such as this one, taken from a Caliper test, before extending a final offer. The Caliper is a comprehensive 180-question personality test with sections ranging from mathematical sequences, number series and letter patterns, and verbal analogies to self-assessment questions about whether you “least likely agree” or “most likely agree” with certain statements.

Assessment tools used to be reserved for Information Technology (IT) and programming and quantitative-focused hires. We now estimate that approximately one in four established hedge funds are administering assessment tools to investment professionals and infrastructure personnel in order to evaluate a wide variety of analytical skill sets and “softer qualities” such as individual personality characteristics, motivations, and potential personal strengths as well as possible limitations. IQ tests in various disguised and abbreviated forms are also administered.

Psychologists are sometimes brought in for final rounds. In one such final round for a multi-billion dollar NYC fund, a psychologist politely and unassumingly described his academic background and provided detailed information about his children, their names and their birthdays, as an ice-breaker, or so the candidate thought. Before turning to the candidate to answer questions, the psychologist asked the candidate if he remembered the psychologist’s kids' names, their birthdays, their schooling, and other facts that he had mentioned. An exercise in active listening.

The candidate recollected about 50 percent, and then the psychologist casually reviewed all the facts about his family again and asked a second time... Round 2 of the active listening exercise and a test of the candidate’s ability to absorb apparently unimportant information.

Other funds may also outsource these talent assessments to consulting groups such as ghSMART or major search firms (Heidrick & Struggles, Korn Ferry) that provide interview-based assessments at the senior-most levels of the firm.

None of these assessments will replace the standard interview questions relevant to specific functional roles within a fund. And so far smaller funds are not as keen on such assessment tools, perhaps because of the costs/administration that they entail or perhaps because the smaller funds are not yet focused on culture/culture-fit issues. They rely instead on the more traditional hedge fund questions for investment professionals and relevant experience for senior infrastructure hires.

The good news is that if you’re being asked to take such a test, chances are very good that the firm likes you enough to want you to get to the next level.