CFA Level 3 - Private Markets Pathway

Name: CFA Level 3 - Private Markets Pathway
Rating: 4.2 (31 reviews)

Mastering Private Markets: Strategies, Valuation, and Investment Insights for General Partners

Created byElias Muchineripi Mashayamombe

Last updated 10/2025

English

What you'll learn

Distinguish the features, structures, and methods of private and public investments, focusing on their unique characteristics and implications for investors.
Evaluate how private market features impact risk and return, compare across asset classes, and incorporate private markets into asset allocation strategies.
Explore liquidity considerations, investment processes, and the role of manager skills in optimizing portfolio diversification and performance.
Understand venture capital, growth equity, buyout strategies, and valuation methods, including the VC and LBO models.
Examine private debt strategies, including venture debt, mezzanine debt, leveraged loans, and high-yield bonds, along with their profiles and valuation.
Study distressed debt, event-driven opportunities, convertible bond arbitrage, and associated risks like credit, liquidity, and legal risks.
Assess private real estate and infrastructure investments, focusing on value drivers, due diligence, valuation approaches, and risk-return characteristics.

Course content

8 sections • 45 lectures • 26h 56m total length

Introduction1:34

Private vs. Public Investments: Key Differences & Structures28:49
Key aspects of private and public investments, covering:
Features of Private vs. Public Markets: Understanding their unique characteristics.
Asset Prices & Performance Measurement: How performance is tracked and valued.
Liquidity & Investment Processes: The role of liquidity in decision-making.
Manager Skills & Portfolio Diversification: What makes a great manager and how diversification helps.
Investment Structures: Comparing private and public structures, including direct and indirect investment methods.
Private vs. Public Investments
Private vs. Public Investments: Key Return Metrics39:07
We will explore private vs. public investments with practical exercises on critical return calculations:
Internal Rate of Return (IRR) and Return on Investment (ROI): Key measures of profitability.
Public Market Equivalence (PME): Comparing private returns to public benchmarks.
Fund Multiples:
Distributed to Paid-In (DPI) for realized returns.
Residual Value to Paid-In (RVPI) for unrealized returns.
Total Value to Paid-In (TVPI) for overall performance.
Key Return Metrics
Private vs. Public Investments: Risk, Return & Asset Allocation21:20
Risk, Return & Asset Allocation
Private Investments & Structures Practice Questions32:05

Understanding Private Debt: Types, Life Cycles, and Financing Comparisons1:12:25
Understanding Private Debt
Private Debt | High-Yield Bonds, Leveraged Loans & Convertible Bonds55:18
HY, Leveraged & Convertible Bonds
Private Debt | Unitranche vs. Mezzanine Debt33:30
Unitranche vs. Mezzanine Debt
Private Debt Profiles, Valuations, Risk & Return50:55
Valuations, Risk & Return
Private Debt Practice Questions38:13

Private Special Situations | Features of Distressed Debt37:48
We explore special investment situations, a fascinating niche within private markets poised for significant growth. Learn how short-term opportunities, driven by events such as financial distress, fraud, litigation, and mergers, can influence corporate and sovereign issuers' values.
? What You’ll Learn:
Types of events: financial distress, dislocations, and non-financial disruptions.
Investment strategies: from credit events to capital structure arbitrage.
Key risks: timing, credit, legal, and market uncertainties.
The growing importance of specialized knowledge in bankruptcy processes and valuation.
How investors capitalize on distressed debt, merger arbitrage, and convertible bonds.

? Market Insights: Special situations represent a smaller slice of private markets but are projected to exceed USD 1 trillion AUM by 2027. Understand the dynamic interplay between shareholders, debtholders, and firm value during financial distress.
Distressed Debt: Key Concepts, Indicators, and Strategies1:08:07
Features of Distressed Debt & Strategies
The Merton Model for Credit Risk Analysis | Structural Models of Debt Default25:55
Merton Model
Capital Structure Arbitrage | The Hedge Ratio18:40
Capital Structure Arbitrage
Asset Swaps | Synthetic Bond Positions | Synthetic Convertible Bonds28:25
Synthentics
Implied Credit Spread Using Goal Seek Function Excel | Structural/Merton Model9:57
Merton Models Practice Questions | Changes in Volatility19:02
Due Diligence | Risk & Return in Strategic Asset Allocation46:48
Due Diligence, Risk & Return
Private Special Situations Practice Questions33:15

Private Real Estate Investments | An Introduction45:25
Introduction
Real Estate Return Matrices | Practice Questions & Calculations!25:50
Economic Value Drivers & Portfolio Characteristics39:53
Private Real Estate Case Study | Oversupply & Economic Value Drivers14:21
Economic Value Drivers
Private Real Estate Due Diligence & Valuation with Scenario Analysis51:08
Private Real Estate Valuation Using Scenario Analysis | Homework Review16:39
Timberland & Farmland Investments | Risk & Return in Private Real Estate1:06:56
Timber & Farm-Land
Risk-Return Spectrum | MOIC & IRR Calculations10:13
Risk & Return
Private Real Estate Practice Questions56:01

Infrastructure Features & Methods | Risk & Return Spectrum37:01
Infrastructure Features & Methods
Special Purpose Entities & Project Bidding27:01
SPEs
Evaluating the Creditworthiness | Key Ratios & GP Fee33:17
Key Ratios & GP Fees
Key Ratios & Management Fees Homework18:51
Due Diligence & Valuation: The Build-Up Approach42:07
Due Diligence Practice | Sensitivity Analysis & Scenario Testing20:36
Risk & Return in Infrastructure Investements11:45
Risk & Return
Practice Problems & Final Review| Private Markets Series Finale37:37

Requirements

This course is designed to be accessible while providing advanced insights into private markets. The following are recommended, but not mandatory, prerequisites: Skills & Knowledge: Familiarity with financial concepts such as risk and return, portfolio diversification, and asset valuation. Basic understanding of investment vehicles (e.g., stocks, bonds, and mutual funds). Experience: Ideal for CFA Level 3 candidates or professionals with prior exposure to investment management, private equity, or real estate investments. No prior private market experience is required; we start with foundational concepts. Tools or Equipment: A computer or tablet with internet access to access course materials and complete assignments. A financial calculator (e.g., BA II Plus) for practical exercises. No Barriers for Beginners Even if you’re new to private markets, this course provides a step-by-step approach, making it suitable for anyone eager to learn about this growing field in investment management.

Description

This course provides a comprehensive exploration of private markets investing, with a primary focus on the perspective of General Partners (GPs). It is designed to equip participants with essential valuation and investment skills across various asset classes, including private equity, private debt, real estate, infrastructure, and special situations. Through a structured curriculum, the course delves into the unique characteristics of private investments, their risk-return profiles, and their role in diversified portfolios.

Participants will gain a deep understanding of private investment structures, the dynamics between General Partners (GPs) and Limited Partners (LPs), and the investment process from deal sourcing to exit strategies. The course thoroughly examines private equity strategies, from venture capital to buyouts, alongside private debt instruments such as leveraged loans and mezzanine financing. Additionally, it covers specialized investment opportunities in distressed assets, capital structure arbitrage, and event-driven strategies.

The curriculum extends to private real estate and infrastructure investments, analyzing their valuation techniques, economic drivers, and financing structures. Particular attention is given to niche asset classes like timberland and farmland, as well as the complexities of infrastructure investment lifecycles.

By the end of the course, participants will have developed the analytical skills and strategic insights necessary for careers in private equity, venture capital, investment banking, mergers and acquisitions (M&A), corporate finance, corporate development/strategy, and capital markets. This course is ideal for those looking to master the intricacies of private market investing and enhance their ability to navigate the complexities of alternative asset management.

Who this course is for:

This course is designed for CFA Level 3 candidates, finance professionals, institutional investors, career changers, and enthusiastic learners seeking to deepen their understanding of private markets, including private equity, private debt, real estate, and infrastructure investments, and their role in investment management.

CFA Level 3 - Private Markets Pathway

What you'll learn

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Course content

Introduction1 lecture • 2min

Private Investments & Structures4 lectures • 2hr 1min

General Partner & Investor Perspectives & the Investment Process4 lectures • 2hr 52min

Private Equity5 lectures • 3hr 48min

Private Debt5 lectures • 4hr 10min

Private Special Situations9 lectures • 4hr 48min

Private Real Estate9 lectures • 5hr 26min

Private Infrastructure8 lectures • 3hr 48min

Requirements

Description

Who this course is for: