Subject: File No. S7-18-09
From: Leighton Strader W Strader
Affiliation: Partner, Virginia Ventures, LLC

August 27, 2009

Gentlemen and Ladies:
These comments are concerning the proposed rules concerning the activities of TPM's and their association and ability to solicit public entities for investment management services.

Our website provides deeper background on us.

We are 30 year products of Wall Street and the investment management industry, and have hired TPM's, have had registered TPM's in our employ, and are extremely familiar with the Public Pension Plan Sector.

We are disturbed that the SEC proposed rule would obliterate the ability of many TPM's to market to public entities. There is no question the practice needs more oversight, but to totally deny their ability to earn a living because they have good relationships within this sector is highly short sighted.

The role of a TPM is manifold. Productive TPM's perform more functions than just "selling" product. Because of their relationships they save public pension staff hours of culling through needless and inappropriate documents and products, they hone the process so pension staffers, board and investment committee members are not hounded by managers with nothing to bring to the table.

From the manager's perspective, there are many managers, whose products do not warrant permanent marketing or sales forces. These include Hedge Funds, Private Equity, Venture Capital and some who manage hard assets like Real Estate. In the spirit of firm efficiency, these firms rely heavily on TPM's for two reasons. First, the TPM can target clients and save time (read that money) in locating prospects. Second, because the TPM does most of the heavy lifting, the manager can resume his or her skill set without interruption. Both of these benefits accrue to the eventual clients - lower fees and more opportunity for better returns.

By your suggested edict you will, by definition, favor the larger firms who can afford a full marketing department and place unnatural pressures on smaller firms who use the TPM model as their main source of client outreach. An outcome with not incidental consequences. Please take time to look at the skew of investment management firms in any sector. What you will see is there is an enormous "left-hand bias" to the curve. There are 10, 20 or 30 large firms and then the curve drops dramatically. The "Silent Majority" are hundreds of firms, who manage money with the same skills as large managers, and are qualified in many ways to manage public pension monies.

Stiffing and retarding the growth of those firms by depriving them of their ability to market honestly within any sector, public or otherwise, is short-sighted and damaging to the industry and its clients.


Leighton Strader, Partner
Virginia Ventures, LLC