Proskauer advises asset managers, including private credit platforms, as they partner with banks, insurers, sovereign wealth funds, and other sources of capital. These partnerships provide creative financing solutions for borrowers and other market participants while making the most of each party’s strengths. We have been at the forefront of this evolving area for more than 15 years, advising on joint ventures and other strategic partnerships. Our interdisciplinary team brings together corporate, funds, regulatory, employment, and finance lawyers with practical experience structuring these arrangements.

Joint ventures between banks and private credit firms have become increasingly common as both sides respond to structural changes in the lending market. Heightened regulatory capital requirements and supervisory scrutiny have constrained banks’ ability to hold certain loans on their balance sheets, particularly in leveraged and middle-market lending. At the same time, many private credit managers have significant dry powder driven by investor demand for floating-rate, yield-oriented assets. Joint ventures allow banks to support borrower relationships while sharing risk and capital burdens with private lenders that are less constrained by bank regulation.

For private credit managers, partnering with banks can provide access to proprietary deal flow and long-standing borrower relationships that would be difficult, time-consuming, and costly to replicate independently. Banks contribute origination scale, sector experience, and a diversified suite of credit solutions, while private lenders contribute flexible capital and a higher risk appetite. These structures can take many forms — co-lending arrangements, programmatic forward-flow agreements, and jointly managed vehicles — but they share a common goal: combining the strengths of regulated and less regulated capital to compete more effectively.

Broader market dynamics continue to reinforce this trend. Borrowers seek certainty of execution, larger hold sizes, and customized financing solutions, particularly in volatile interest-rate environments and periods of bank retrenchment. Joint ventures can help meet these needs by creating hybrid platforms that offer both balance-sheet lending and off-balance-sheet capital at scale. As private credit continues to institutionalize and banks adapt their business models, these partnerships are likely to remain an important feature of the credit ecosystem.