Davis Polk partner David Kennedy discussed with Private Funds CFO how the role of a finance lawyer has evolved with the rise in private credit and an increasingly complex range of fund finance options.

David noted that the rise in private credit and comprehensive fund finance facilities means as a lawyer he has “been able to develop some of the more complicated structures that have become the norm in the private credit space, like NAV facilities, hybrid facilities and preferred equity, to service the full lifecycle of fund borrowers.”

However, as financial facilities become increasingly niche, he cautioned against being too narrowly focused in one area. “There is a real benefit to being able to look at a fund structure, their debt stacks, and to be able to talk intelligently about all components and financing needs, including sub lines, NAV facilities, back leverage facilities, hybrids and other acquisition financing,” he said.

David explained, “Proposing a workable financing solution that mitigates risk requires solid legal understanding, an acute sense of what is commercial and the practicalities of each transaction and having both borrower and lender sides of the equation in your mind is helpful.”

Noting that advisers have to work at an accelerated pace, David said, “Two years ago, we would have had two months to complete a NAV facility. This year, I’ve worked on transactions that have taken two to three weeks, and there’s still a lot of diligence and a lot to understand from a structural perspective before you get to documentation.”

“How the CFO role is evolving,” Private Funds CFO (December 22, 2025) (subscription required)

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