Careers in fund finance: Interview with Katie McMenamin of Travers Smith

Adding to our regular series of updates on recruitment and talent acquisition in fund finance, Brickfield is pleased to now present the first in a series of in-depth interviews with rising stars and leading players in the industry.

Our aim with these articles is to provide insight into the real experiences of lawyers and bankers who have built successful careers in the fund finance industry.

Katie McMenamin, London-based partner in Travers Smith, kindly agreed to (virtually) sit down with us and tell the story of how and why she began her career in fund finance, how her career has progressed, and how her team manage career development and training.

I trained at Travers Smith and, in 2012, I qualified into what was then called the Banking and Corporate Recovery team at a very busy time in the cycle. From the outset I worked on a diverse range of financing matters for corporate borrowers, financial sponsors, and lenders not limited to the fund finance space – this allowed me to quickly gain a broad experience in lending principles and documentation across leverage finance, speciality finance, corporate lending and even distressed scenarios. I’ve always felt this broad base to my training has equipped me well to be nimble and imaginative when developing new products and tools for application in the evolving fund finance market as my career and specialism in this space progressed.

Travers Smith’s place as a full service law firm focusing heavily on all aspects of the asset management business also gave me great exposure early on to a broader understanding of how asset management vehicles of all types operate at every level of the investment and capital structure. Travers Smith has had dedicated fund finance expertise within our finance group for over 25 years and this expertise and team has grown exponentially over time alongside the expansion of the fund finance market itself.

I was first involved in fund finance from a very junior level, primarily advising some of the most active lender clients in the European market at the time. This gave me an excellent grounding in what was a more narrow fund finance product range at the time (mainly focused on subscription lines and occasional GP or hybrid facilities). In 2015, I spent 10 months on secondment to the Fund Finance (now Fund Solutions) team at Investec Bank plc in London. I have continued to work very closely with this team and the individuals I worked alongside on secondment ever since on the whole range of fund finance products now available in the market, including some of the most highly structured and bespoke lending solutions required by clients in the market today.

Alongside client relationships formed from very early on in my qualified career, my network and our work within the team naturally expanded to include the host of new entrants to the fund finance market on the lending side (including as part of a broader market trend towards the growth of non-bank and institutional lenders) and increased demand from our asset management clients across the firm for assistance with more complex, more frequent and more structured financing solutions at the fund level.

As a result of all of this, our fund finance practice has grown significantly and now consists of four dedicated partners advising many of the most active fund finance providers and borrowers on the full range of products available in the market. This team and market growth has also coincided with the efforts of the FFA and other industry bodies who have done a fantastic job of raising the profile of fund finance specifically and our firm’s and my own involvement in these initiatives from their infancy has always greatly added to my market view, intel and network in the broadest sense.

It’s still an actively growing market, and constantly evolving which means there’s always a new challenge to consider and every deal is highly bespoke. As market participants find creative ways of implementing ever-expanding financing structures to meet the challenges faced by funds, GPs and managers, I’ve been able to work with clients entering the market for the first time on developing entirely new offerings, whilst also supporting some of the most established lenders in drafting precedent documentation to expand their capabilities into complex new areas.

Fund finance is definitely still on its journey and that’s true from both the perspective of lenders, who are grappling with ever changing client needs and product demands alongside internal balance sheet optimisation challenges, and borrowers, for whom macro trends and the constant hunt for yield leads them to be ever more imaginative in their use of debt throughout the fund structure whilst needing to be acutely sensitive to diverse LP bases’ evolving attitudes to leverage. Private capital more broadly is still maturing, the growth of the secondaries market, the development of GP-led transactions, the emergence of genuinely multi-disciplined managers and the potential retailisation of the space are just a few current examples of this.

Fund finance has shown itself to be one of the most responsive and attuned bodies to all the latest trends as they emerge. For me, this makes it one of the most exciting markets to operate in as it allows you to be part of designing solutions for very new challenges and structures as they develop real time in the broader private capital sphere.

Clearly we look for talented and driven individuals who show technical excellence, but they have to really want to be part of a team. Travers Smith is a genuinely collaborative and inclusive place to work and that culture is what supports our focus on providing outstanding client service. We treat our clients’ business as our business, their challenges as our own and we work as part of their team to get things done, in a straight-talking, open way. We get the best results when everyone can be themselves and we provide a supportive, close-knit and non-hierarchical environment where we look out for each other.

From a technical perspective we really prize the ability to apply legal expertise to the commercial reality at hand – in the fund finance team in particular this means building a holistic understanding of the asset management space, a genuine grasp of how funds operate and a real familiarity with all the relevant funds and regulatory dimensions. To be a really good fund finance lawyer, we do believe you necessarily have to become a very decent funds lawyer alongside your technical expertise in finance documentation. As a result, we dedicate a lot of time and resource to training the junior members of the team in a genuinely rounded way with a focus on applied, on the job support from across all the relevant practice areas in the firm.

Having a dedicated team means that we have a huge amount of experience in the European fund finance market, and that experience is absolutely critical in developing innovative financing solutions for our clients. For our clients to maintain their competitive advantage in this fast-moving sector, they rely on our ability to identify and advise on current trends, meaning our team has constant exposure to some of the most sophisticated and exciting work available in the market. It also means we have a highly-developed and balanced practice, advising both lenders and funds allowing us to quickly identify the key legal and commercial points on any transaction and enabling us to find pragmatic and workable solutions.

Travers Smith offers the best of both worlds because as a junior associate, you’re expected to maintain a much broader practice across our Finance Group and that will almost certainly include acting for private equity, private equity real estate, infra and private credit funds on a variety of debt facilities secured at the asset level, alongside building your familiarity with fund level structuring and leverage products. What we uniquely enjoy at Travers Smith in the London market is a genuinely dedicated fund finance team which sits alongside a full service law firm servicing all the needs of a broad and established asset management client base. Being able to combine this sector expertise with specialist input and market knowledge from market-leading funds, private equity, tax and regulatory teams is so important when working to develop the cutting edge products in the market and spotting the new trends and challenges facing both lenders and borrowers in the fund finance space.

Commercially it’s also a real strength that we can facilitate new relationships between our lender and asset manager clients as we’re very familiar with their respective product offerings and demand for leverage solutions.

When not working remotely(!), we operate a room-sharing system at Travers Smith which typically sees a partner, senior associate, junior associate and trainee all share one office. This allows for a huge amount of learning by osmosis where everyone has exposure to the bigger picture and the full context of how their work contributes to the overall transaction, as well as meaning that more junior members of the team always have someone on hand to answer any questions and provide them with on-going support and encouragement on a day to day basis.

This ‘on the job’ training is supplemented by a series of formal training sessions for new recruits administered by partners and knowledge counsel covering LMA principles and documentation more broadly and fund finance specific principles and structures. Particularly at the more junior associate level, we believe that a firm grounding and sound technical knowledge in lending documentation and structures more generally is the key attribute on which we can overlay expertise in fund finance specific principles via our approach to training.

What we do look for as a real strength when recruiting within our fund finance team is a grasp of the broader private capital space and an understanding of the market in which our asset management focused clients operate and why in broad terms leverage may typically be employed across various strata of a typical fund structure.

As the market has developed over the course of my career to date, I’ve really enjoyed being able to collaborate with colleagues from across Travers Smith more and more frequently. Investor demands for liquidity are driving fund managers to use products in creative ways and that’s meant regularly fielding multi-disciplinary teams to find the most effective solutions that address all stakeholders’ interests. These teams are required to be genuinely joined up, seamlessly inputting expertise which straddles traditional boundaries of finance, corporate and funds advice.

Travers Smith has a really strong presence in the alternative asset management sector in its broadest sense and it’s always kept it so interesting for me being able to work with some incredibly bright minds from across our large Funds, Private Equity, Tax, and Regulatory teams to provide advice on complex products across all levels of the fund structure and spanning a whole range of asset classes.

Being a part of this much broader team which is creatively drawing on all available tools and pools of available capital to drive returns aligns us closely with our clients’ objectives and it’s rewarding to feel a part of something larger where clients and teams of advisers are constructively pulling in the same direction ultimately achieving positive outcomes for investors. The fast pace of growth in our fund finance practice is just one part of this much broader maturation of the legal services now required by the most sophisticated players in the private capital space.