Why do PE firms ask for SAT score?
At least on this site, mainly I see questions about SAT score importance mainly geared to the PE firms. I feel like S&T makes the most sense to ask about SAT scores because you need to be able to think logically under pressure but not sure about PE.
Only reason I see why is that is a differentating factor but still doesn't make sense cuz it is a high school test and something more recent to show grit and hard work makes more sense.
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oof u got me
I got an ok score on the ACT (by wall street standards, it would be considered pretty good by almost everyone else lmao) but I perform terribly under pressure. Working on it, but still have a long way to go. The ACT is more time-focused (while the SAT asks marginally harder questions with more time) and I can confirm that I am by far the most anxious person in the world under pressure. (BTW if anyone has any tips pls feel free to share)
At least for consulting, there's research that shows that how you do in a case interview has little predictive power on how you'd do on an actual assignment. Reason being that MBB case interviewing is something you do on the spot, whereas an actual assignment takes days to prepare and dig information, requiring a very different skillet. All of that to say that I agree that SATs are poor indicators of success in PE because the skills overlap very little, BUT they help if you're looking to weed candidates out or make an apples to apples comparison between GPAs.
Positive feedback loop. Because I was judged by my SAT score when I went through recruiting, I feel the need to judge candidates on their SAT score so they don't have it "easier than me". Also, given this cycle, you get a selection effect where people who CARE about SAT get the jobs, which means they CARE about SAT scores for applicants. Same reason that no matter what anyone says... the analyst experience will always be terrible because the people who came before -- and control the program -- had it terrible too.
Easy way to weed out applicants; i.e. you scored a 1500/2400, pretty sure you're not as bright as someone who scored 2200+/2400
One guy told me he got 1600 on SAT. Later found out it was on a 2400 scale.
lol did he get hired???
Because of the boomer mindset, same reason we cant work from home or atleast its a battle.
lol I am from semi-target and was applying to a few PE firms and when I told them my score (1520 on 1600 scale) they were like "oh wow why aren't u at a better school." These guys were from the time when a perfect SAT score + varsity captain of lacrosse team could gain you admission into any semi-target and have a big chance at getting into a target.
Some boomers have good reasoning behind it but most are legitimately out of touch.
to keep it a buck, with that score you should be at at least a top semi target. Unless you completely slacked off in HS ur score is at least top 75 for all semis and middle 50 for some ivies as well.
It's a standard data point (unlike GPA, which by itself doesn't factor in school, major, etc.) that has some, albeit maybe low, correlation with aptitude.
Most of the people that complain about its usage are those who scored poorly. Our firm looks takes the scores into account but don't think we would ding a candidate for poor scores if they crushed their interviews and had good references.
FWIW, our fund apparently did some research, and the two best indicators of performance were standardized test scores and GPA. Haven't seen the data but thought it was an interesting finding. Know multiple people with perfect SAT or ACT scores that worked here (small sample size but all were tanks on the job).
Officially, to find intelligent people who excel in all aspects of their life and are strong critical thinkers.
Unofficially, because when you get 1000+ applications per opening and half of them have IB experience, you need another filter to determine who to actually talk to. GPA, school, test scores… easy filters if you need you need to thin the herd.
Want to interview 10 people and have 100 applicants with prior IB experience from good schools? Take the top 9% of test scores plus the one resume from the partner’s nephew, boom you’re done
Because they can easily find someone from EB/BB/MBB and that have a top SAT.
Like it or not, it’s a filter for continued “success”
it’s much lower risk to hire someone that was born in a target hospital like JHU, went to Exeter, 2400, Harvard, GS TMT vs someone that has a 1800 SAT and is at GS TMT
Because the candidates are 23 years old and there’s only so many datapoints on their track record.
Sure, there’s plenty of dumb kids that can will their way into getting a great SAT score… and that’s exactly the point. It screens for raw intellect, drive, grit, and ability to identify what is important to excel, dialing into that objective, and crushing it.
Sure, there’s plenty of smart slackers who crush the SAT without prepping.
Sure, there’s dumb kids who crush the SAT by obsessively prepping for it.
Sure, there’s not very thoughtful kids who had mommy and daddy tee up all the right prep courses and had them sit for the exam 7 times until they aced it.
Its by no means perfect, but it’s standardized and ubiquitous.
And it’s a datapoint in the broader compendium of somewhat limited considerations.
If you went to Princeton, interned in the White House, and were an alternate on the US Olympic Tae Kwon Do team, I could give a shit what your SAT score is. If you fall into the fat part of the bell curve of qualified candidates, SAT score and GPA are just easy metrics to narrow down who you’re considering.
The screening processes go, most of these attributes are used mostly to eliminate candidates from the pool rather than select them.
If a candidate is stellar in all other aspects (GS TMT, 34 ACT, 760 GMAT) but a lower GPA 3.6 from a semi-target school. Would that ding them for MF PE recruiting?
Would having a deferred acceptance to a top MBA program like HBS 2+2 or Stanford GSB Deferred help counter the lower GPA as well?
Definitely not a ding, especially out of a group like GS TMT. Crush the headhunter meetings and you will likely get some looks.
I work at a UMM fund that has taken a few GS TMT kids over the last 3-4 years. Know one of them was deep in a process with Silver Lake (came from a semi-target too).
Eileen Gu is probably one of the very few people who fit this bill. She got accepted into Stanford, got 1580, and as we all know won gold in freestyle skiing. Also is a model and attended a San Fran prep school.
I hate it because I do believe some people evolve a lot between when they sit for the SAT and when they're applying for a PE job as young investment bankers. But from the PE firm's perspective, when you have 100 banking analyst candidates who all have good reviews / college / gpa etc, it's just another data point to help move the needle.
what if they lied? how does the firm check?
I had firms asked me for an official report from CollegeBoard
It was supposedly a way to level the playing field (nevermind the studies showing how closely SAT correlates to income). We were religious about it at my old consulting firm. If a resume had competitive internships but a low SAT we’d go “oh, his dad got those for him” and throw the resume in the trash
Garbage take. And sorry for stealing your spot at harvard
Higher average SAT = higher returns. Also helps when fundraising.
Is a 1510 out of 1600 good enough? Not for college, but for recruiting.
in my experience >1400/1600 is "enough" to pass the filter as long as everything else on your application is good. Unless you got a shit score like 1250 then I wouldn't really worry about it much.
It's dumb but the SAT score is basically treated as a proxy for intelligence.
Again, I think this is stupid and meaningless, but I believe that's why folks ask for it.
Studies show that ACT/SAT takers rarely increase more than 200 points / equivalent for ACT among numerous attempts, showcasing that it's a solid indicator of intelligence / aptitude
Do firms also require it for PE secondaries recruiting, or is it mostly for buyout?
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