Tips for New Fund Finance Professionals

Executive Summary

In this Legal Update, we provide suggestions for junior finance professionals new to the fund finance market and offer practical suggestions for beginning their careers with a solid foundation.

What to Know: Tips for New Fund Finance Bankers

1. Talk the Talk. Fund finance, like any other specialized area of finance, has its own vocabulary and jargon. To better understand the questions and concerns of various stakeholders, bookmark the Mayer Brown “Beginner’s Glossary to Subscription Finance” for easy reference. Knowing the language of fund finance will also help you…
2. Understand the Structure. The key to any fund financing is the structure of the relevant funds and their related entities. The structure often determines the parties to be included in the main loan documentation for any financing as well as the location of the collateral that will secure such financing. Request a detailed structure chart early in any transaction and keep it handy throughout the negotiation as a reference point for credit and security concerns. Speaking of concerns…
3. Pick Up the Phone. Many people early in their career prefer to email their colleagues or their lawyers so as not to inconvenience anyone, but a live discussion is often more effective to work through certain concepts. It is your outside counsel’s job to make sure you understand the documentation (and if you are fund-side, your banker’s job to walk through the business agreement on the financial terms until the flow and fee structure is clear and understood by all parties). Your counsel or your banker also enjoy speaking with you, and having a personal connection with such professionals makes it easier to …
4. Ask Why. If you don’t understand why certain comments were accepted or rejected, ask a colleague on the deal team or your outside counsel. Understanding the rationale will help you build your market knowledge and experience to help you make similar decisions regarding comments in the future. If the decision was based on a different transaction, ask why a comment was accepted there, and why it makes sense for this deal as well. The same comments do not necessarily make sense in every transaction.
5. Stay Informed. Stay on top of market and industry developments by subscribing to relevant newsletters and mailing lists (including ours and connect with us on LinkedIn). Being up to speed on current trends not only accelerates your market knowledge but provides easy discussion topics when needed, which brings us to…
6. Engage in Small Talk. When you find yourself with waiting time at the beginning of a meeting or while waiting for others to join a conference call, make small talk with your colleagues, counsel or bankers. Establishing personal relationships helps facilitate communication and understanding. It also makes negotiations easier to navigate. Speaking of which…
7. Keep Your Cool. Negotiations may sometimes get heated, especially under tight timing circumstances. Fund finance is a close community and you will often find yourself across from, or working with, the same people repeatedly. At the end of the day, everyone wants to get the deal done, and handling tense situations professionally will help make sure doors to future deals stay open.
8. Join Relevant Industry Groups. Organizations such as the Fund Finance Association (educating members, legislators, regulators, and other constituencies about the fund finance market and related capital markets), Women in Fund Finance (focused on the increased engagement, recognition and promotion of women leaders within the fund finance industry globally) and NextGen (establishing a forum for the exclusive benefit of junior, working professionals in the fund finance industry) provide many avenues for education and connection in the industry at all levels.
9. Network, Network, Network. Seek out opportunities to attend conferences, panels, presentations and informal mixers. These events offer a multitude of opportunities to Stay Informed (#5) about industry trends and standards and Engage in Small Talk (#6) with bankers, attorneys and other professionals in the industry. Building a network of professional connections at every level not only increases your personal knowledge but also multiplies opportunities for new and expanded business. When you Join Relevant Industry Subgroups (#8), you can take advantage of the variety of programming they offer to make the most of such opportunities.
10. Follow Through. Received a great explanation of a point of nuance in negotiation from a colleague? Keep an eye out for similar scenarios in future matters, and let them know that you retained their guidance and continue to benefit. Learned something new at a panel or symposium? Take a few minutes to think through the impact that may have on any open matters, or if it would be of interest to share with any clients and colleagues. Met and made a great connection with another professional at an industry event? Set up some time for a follow-up coffee or lunch. Once you set yourself up for success, it’s important to actually put all those new tools and skills to practical use.

Takeaways

Fund finance is a complex and fast-paced practice. If you are new to the field, taking the time to understand the practice, build your knowledge base and grow your relationships will help you set a strong foundation for years to come.