Virginia Ventures
FAQ Principals Nan Strader Leighton Strader

What prompted you to establish Virginia Ventures, LLC?

We realized our body of previous work was complementary and would fill a need in today's marketplace. We had practical experiences involving marketing, business construction, business ownership, product knowledge and development and managerial experience. We knew the investment management industry was starved for professionals who could precisely relate to them, and converse on their level as an owner or manager. Further, we felt there was a void in "straight talk" to fiduciaries concerning manager-related issues. We were confident our then 30 years of institutional experience in the industry would be value added to the institutional marketplace.

What is the practitioner experience behind the principals of the firm?

In addition to our specific Wall Street experiences we have had experience in forming both traditional and alternative investment managers; working with high profile research organizations in the construction of operational capabilities platforms; engaged by international investment consulting firms to form their hedge fund practice group; founding and maturing a private equity firm specifically dedicated to the investment management industry; investing in technology critical to investment firms. All of these experiences have contributed to our body of knowledge. We never stop learning and applying today's teachings to tomorrows clients.

Upon completion of a contract with a firm, do you continue to stay involved with the firm, and are you often asked to take on other projects that may stem from your initial task?

Yes. Former clients trust us and frequently re-engage us and/or request our input on other matters. We often provide input gratis, because we see it as an extended warranty on our work, part of client service, and because our clients are referral based, an excellent source of new business.

How do you work with the "Synchrony Group" to gain marketplace reconnaissance?

The Synchrony Group are our contacts in the institutional investment world, and provide us with intelligence on trends, predilections, and issues. We value these relationships, many of which span more than one decade. We are constantly "pinging" the Synchrony Group with brief ("100 Second Survey") inquiries or more in depth questionnaires and interviews on issues. Our goal is manifold. First, we feel the combination of our resident knowledge combined with the intelligence of the marketplace is an optimal set for our clients. Second, we encourage every client to participate in targeted conference calls to hear firsthand from practitioners in various subjects. Last, we always share our collated findings with those who take their time to participate. We think this is a winning formula for everyone.

Do you collect any fees for recommending professionals in your "Consortia Group" and what is your due diligence process on each entity?

No. We do not share in any revenue a Consortia Group member receives from our clients. We operate as a fiduciary, and believe that would present a conflict.

Our due diligence is thorough on our Consortia Group members. It involves researching client work, reputational and a firsthand look at deliverables.

What is the most common issue you encounter when you speak with investment managers?

Probably the most common issue confronting investment managers is how do they perpetuate their businesses. Many times we encounter firms that have either not given thought to equity ownership transition, or have only modestly sprinkled ownership beyond the very highest echelons of their firms. We are proponents of a deep ownership structure in investment managers. We believe this model is particularly effective in this industry, as the incentives created throughout the ranks trickle up directly to positively affect investment integrity. Because compensation in the industry is typically significant, professionals are looking for other motivational incentives. The ownership carrot is powerful not only internally, but it serves as a tremendous recruiting tool. Properly structured, a transition plan can possess merits beneficial to the Founder and the recipient. This is the balance we're always seeking.

When Virginia Ventures encounters a firm, what is your customary process?

We believe it is critical for us to invest time interviewing senior management to gain a thorough preliminary impression of the culture, decision process, growth goals, governance and personality of a firm. While many firms espouse similar investment products and process, every firm is like a snowflake. No two are alike, and while you can apply homogenous metrics, the granular aspects are where firms succeed and fail. Because we bring practitioner credentials with us, we are able to cut to these essential issues rapidly and articulate solution sets for prospects. It is not uncommon that we spot critical positive and negative attributes on a first visit. Normally, we will produce an issues memo detailing the aspects of the particular firm, that we believe need addressing. The turnaround for this document is 2-3 days of our initial meeting. In that memo we estimate time and costs and articulate process in detail.

We've endured a watershed period in investment management since 2008. What are the most glaring challenges and changes you see in the investment management landscape?

Traditional and non-traditional managers as well as intermediaries, allocators and aggregators are all facing challenges - larger ones and new ones. For fiduciaries it is the challenge of meeting spending or actuarial requirements in a hostile return environment. For investment managers the ingredients by which firms are judged have been shaken and realigned. Where it was, that track record, beta, standard deviation and other contributory return features were prima facia for manager selection; business models, firm integrity, systems and risk management barely got mention or examination. Today, ownership, operational, technological, administrative, trading and vendor relationships are absolutely crucial in the proper examination and due diligence aspects of determining a firm's viability. We are constantly looking at firms that know they have a competitive investment process, but are concerned about business model efficacy, the ability to grow and manage an expanding platform. This is the biggest challenge for PM's who are owners: delegating business decisions, acknowledging the challenges in running a business and conceding those types of decisions to other trusted partners.

How does Virginia Ventures address these challenges?

The investment management industry is a "human capital" business. This is the most challenging type of profession: one where compensation and egos are mutually outsized. Virginia Ventures challenge is to show firm owners and managers the positives benefits of exploring solutions that positively lift the organization, improve the soundness of the business and incent professionals at all levels to perform at optimal capacity for the good of the organization. There are owners who resist these suggestions, but in the main, we find our solution set is embraced and there is plenty of evidence - empirical and anecdotal - pointing to improved firm performance on many levels. We believe a systematic, honest, candid and thorough examination, combined with a specific solution set that is executed precisely will always result in a better investment "athlete".

Why do managers, aggregators, M&A firms and others choose Virginia Ventures versus larger "brand name" advisors?

It is really very simple. We are present and former owners, buyer, sellers, and builders of firms. We are real practitioners, and have an ability to get at granular issues more rapidly and thoroughly than those who have only remote experience. Frankly, some of our clients are those large international consulting firms. They hire us because resident experience is very difficult to retain. Further, we understand the inner-workings of firms and know where the inflection points are, and do not waste professionals' time. Most managers want the unvarnished truth, and they want rapid and focused answers. We deliver that.