Is Fund Finance Good for Lateral Associates? Practice Guide

Dear Morgan S.,

Your Fund Finance Lateral Roadmap

Fund finance has emerged as one of the most attractive lateral destinations for banking associates, and your timing couldn't be better. Here's a step-by-step approach to evaluating and executing this move:

1. Assess Your Transferable Skills

Your commercial lending background provides an excellent foundation for fund finance work. The practice area centers on providing credit facilities to private equity and other investment funds, typically secured by uncalled capital commitments from limited partners. Your experience with institutional lenders and loan documentation translates directly—many of the same banks you've worked with (JPMorgan, Bank of America, Wells Fargo) are major players in the fund finance space.

Consider highlighting any experience you have with subscription agreements, capital call mechanics, or working with sophisticated borrowers. Even tangential exposure to private equity clients or fund structures will strengthen your candidacy.

2. Understand the Market Dynamics

Fund finance has experienced remarkable growth over the past decade, driven by the expansion of private equity assets under management. The practice area now encompasses subscription credit facilities, NAV-based lending, hybrid capital solutions, and increasingly complex structures for alternative asset managers.

New York remains the epicenter of fund finance work, with virtually every major firm building or expanding these groups. Kirkland & Ellis, Latham & Watkins, Simpson Thacher, and Ropes & Gray are among the market leaders, but mid-tier firms like Proskauer Rose and Fried Frank also maintain sophisticated practices.

3. Evaluate Compensation and Work-Life Balance

Fund finance associates generally earn market rates comparable to other corporate practice areas, though compensation can vary by firm and market conditions. If you're targeting large New York firms, you can expect Cravath scale compensation with potential for above-market bonuses at top-tier fund finance practices.

The work tends to be cyclical and may be less unpredictable than traditional M&A due to repeat clients and standardized documentation. However, expect busy periods around fund formation cycles and quarterly capital calls.

4. Plan Your Bar Admission Strategy

Since you're considering New York, check current bar reciprocity requirements early in your process. New York has historically required the bar exam regardless of other state admissions, but verify current requirements as bar reciprocity rules can change. Many firms will provide bar exam support and may offer flexibility around your start date.

5. Position Yourself for Long-Term Success

Fund finance offers several advantages for career development. The client relationships tend to be stickier than traditional corporate work—you'll often work with the same fund sponsors across multiple financing facilities and fund generations. This creates opportunities to develop deep industry expertise and potentially portable relationships.

The practice also provides natural cross-selling opportunities into fund formation, co-investment structures, and other alternative asset work. Many fund finance partners eventually develop portable books of business by becoming go-to counsel for specific fund sponsors.

6. Consider Exit Opportunities

Fund finance experience opens diverse exit paths. In-house opportunities include roles at private equity firms, fund administrators like SS&C or Intertrust, and alternative asset managers. The technical expertise also translates well to roles at specialty finance companies and credit-focused investment firms.

Banking in-house roles represent another strong option, given the relationship between fund finance lawyers and institutional lenders. Many fund finance attorneys eventually move to banks' fund finance lending groups or alternative asset coverage teams.

7. Time Your Move Strategically

As a fourth-year associate, you're in an ideal position for a fund finance lateral. You have sufficient experience to handle complex transactions but enough runway to develop specialized expertise. Recent market trends have generally shown demand for mid-level associates with relevant banking experience, though market conditions can change.

Specialized legal recruiters may have insights into which firms are actively hiring and what specific experience they're seeking in fund finance candidates.

Making the Final Decision

Fund finance represents a compelling lateral opportunity that combines the intellectual challenge of complex financial structures with more sustainable client relationships than traditional corporate work. The practice area's continued growth, driven by private equity's expansion and increasingly sophisticated financing needs, suggests strong long-term prospects.

Your commercial lending background provides a solid foundation, and the New York market offers the deepest opportunities for career development. While any lateral move involves risk, fund finance's trajectory and your timing suggest this could be a career-defining opportunity.