Animal in lake and bird by river (5)
I believe the answer is:
lemur
'animal' is the definition.
(lemur is a kind of animal)
'lake and bird by river' is the wordplay.
'lake' becomes 'l'.
'and' says to put letters next to each other.
'bird' becomes 'emu' (emu is a kind of bird).
'by' is a charade indicator (letters next to each other).
'river' becomes 'r'.
'l'+'emu'+'r'='LEMUR'
'in' is the link.
(Other definitions for lemur that I've seen before include "Arboreal mammal common to Madagascar" , "Madagascan primate" , "Primate found only in Madagascar" , "Social climber" , "Monkey-like animal of Madagascar" .)