Your Guide to the CFA Level III Private Markets Pathway

Choosing your specialization at Level III is a pivotal moment in your CFA journey. Starting in 2025, CFA Institute transitioned from a "one-size-fits-all" curriculum to specialized tracks for Level III. This guide breaks down everything you need to know about the CFA Private Markets Pathway, helping you decide if this high-growth specialization is your ideal fit.

Table of Contents

• Private Markets Pathway Overview

• Pros and Cons of the Private Markets Pathway

• The Career Impact of Selecting the Private Markets Pathway

• Private Markets Pathway Difficulty

• Study Guide for Private Markets Pathway

• Study Materials for Private Markets Pathway

What is the CFA Private Markets Pathway?

The CFA Private Markets Pathway is one of three distinct pathways CFA level III candidates can select when registering to sit for the level III exam. This pathway is a great choice for candidates who want to increase their knowledge in private market investing because they either currently work in this niche area or would like to transition into this area of investing. 

Core Private Markets Curriculum vs. Specialized Content

There are five common core topics, skills, and abilities about investment management that all CFA level III candidates should possess. And according to CFA Institute, over 65-70% of the Level III Core Readings will be the same across no matter which specialized pathway you choose. These common curriculum topics are:

• Asset allocation

• Portfolio construction

• Performance measurement

• Derivatives and risk management

• Ethics

However there is specialized content that candidates who decide to pursue the Private Markets Pathway will need to learn and apply during their exam. This specialized content is broken down into a few different topic areas which are:

• Private investments and structures

• GP and LP perspective and the investment process

• Private equity

• Private debt

• Private special situations

• Private real estate

• Infrastructure

Learning Outcomes for the Private Markets Pathway

There are many learning outcomes specific to the Private Markets Pathway, which level III candidates should aim to study and prepare for. Some examples of what CFA level III candidates should be able to do if they choose the Private Markets Pathway are:

• Discuss the difference between public and private market performance. Calculate, interpret, and discuss the use of performance metrics including distributed to paid-in, residual value to paid-in, and total value to paid-in.

• Discuss how private investment firms align their interests with those of their investors, and calculate, interpret, and discuss private market fund performance from an investor perspective, including management fees and carried interest.

• Estimate and interpret key inputs and calculate the value of a private equity investment for venture capital, growth equity, and buyout situations.

• Analyze private debt profiles and calculate and interpret financial ratios used to value private debt investments.

• Discuss the features of complex investment situations involving financial dislocation or stress.

• Discuss the risk and return among private real estate investments and as compared to other investments as part of a strategic asset allocation.

• Discuss infrastructure investment methods and investment vehicles and their uses

Ease Into CFA Level III Prep With a Free CFA Practice Question

Is the Private Markets Pathway best for you?

The Private Markets Pathway is the best choice for CFA candidates who already manage investments in Private Markets or if you want to transition into a private markets specialization. Although you must stick with your choice of which Specialized Pathway to pursue after registering for the level III exam, there are ongoing discussions about allowing CFA charterholders to add additional specializations through continued education after becoming a CFA Institute member.    

Pros of Private Market Pathway

Below are some of the benefits of choosing the Private Market Pathway:

• Private markets are forecasted to reach significant heights in the coming future so candidates who earn this specialization will be uniquely qualified.

• This pathway is new for the CFA Program so you get to focus on Private Markets topics whereas traditionally in the past you would have only had the Portfolio Management Pathway available to you. 

• The Private Markets Pathway is ideal for candidates looking to transition from traditional banking into buy-side "transactional" roles.

Cons of Private Market Pathway

Below are some of the considerations if you decide to choose the Private Market Pathway:

• You may be less familiar with some of the topics in this specialization if you mainly work with traditional stock/bond analysis.

• This is less established than the traditional Portfolio Management Pathway.

• Once you register for the Private Markets Pathway, you cannot change it for that exam window.

CFA Level III Exam Quiz

Answer these five questions to test your readiness for the Level III Exam

Career Impact: CFA Private Markets Pathway Review

The impact on your career from choosing to pursue the Private Markets Pathway at the Level III will be similar to the impact you’d receive by choosing a different Pathway. Your CFA designation won’t change based on your specialized pathway so amongst your co-workers, it may be obvious that you specialized in private markets but to the general public you will be categorized as someone who passed all three CFA exams.

Now if you plan on applying to a new job or keep your LinkedIn Profile up to date, you can add a note in your resume or profile about how you specialized in Private Markets but your CFA designation will not change. 

Navigating the CFA Private Market Pathway Difficulty

How difficult the CFA Private Market Pathway is compared to the other Pathways is challenging to assess because it may be less or more hard for you depending on your current experience and knowledge. Considering more than half of the CFA Level III curriculum is the same no matter what Specialized Pathway you choose, it’s fair to say that they are equally as challenging and really how hard they are will depend on your specific situation.

If you currently work as a research analyst who specializes in private market investing, it may be more familiar to you than someone who focuses on helping High Net Worth clients and spends more time in areas like family management and philanthropy. 

CFA Level III Private Markets 6-Month Study Plan

Below is a free study plan for CFA candidates who have decided to pursue the CFA Level III Private Markets Pathway using Kaplan Schweser’s CFA Level III Ultimate Prep Package.

Essential Study Materials for Private Markets Pathway

Below are some free and paid study materials for CFA Level III candidates who decide to specialize in Private Markets. 

Free CFA Level III Study Tools

There are many free CFA Level III study materials that candidates can explore to get introduced to specific content topics or refresh their memory. Some options include free practice questions, product samples, and informational videos.

CFA Level III Study Packages

To fully master the technical requirements of the CFA level III exam, it may be wise to consider a CFA prep package. CFA Level III study packages provide the structure to navigate the latest CFA curriculum, including in-depth coverage of private equity strategies across the company life cycle. These paid resources are essential for learning how to estimate key inputs for venture capital and buyout situations or analyzing complex financial ratios used in private debt investments.

Written by Kaplan Schweser experts, reviewed by David McMeekin, CFA, FRM, ERP, SCR, RAI, PRM, CAIA. David is a Director of Product management at Kaplan Schweser and an experienced CFA and FRM Instructor, and content creator. David gained his CFA Charter in 2003, the FRM in 2004, and has been teaching/designing prep materials for both programs ever since.