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Ropes & Gray attorneys provide timely analysis on legal developments, court decisions and changes in legislation and regulations.
Megan Baca: Welcome and thank you for joining us on our latest installment of Women @ RopesTalk, a podcast series brought to you by the Women’s Forum at Ropes & Gray. I’m Megan Baca, a partner at Ropes & Gray with a practice focusing on intellectual property and technology transactions, and I’m also co-head of our firm’s digital health initiative. I’m based in Silicon Valley. On this episode, I’m delighted to be joined by my West Coast colleague, Chelsea Childs, who’s based in San Francisco. Hi, Chelsea—so glad you could join us. To kick things off, why don’t you go ahead and introduce yourself and provide a brief overview of your practice.
Chelsea Childs: Hi, Megan—thanks for having me. I’m super excited to be participating in this podcast with my special guest, whom I’ll introduce later. My practice is in the asset management group. I represent investment management industry clients in a wide variety of regulatory, compliance, and transactional aspects of their business, primarily focused on registered investment companies.
Megan Baca: Who is the special guest that you’ll be interviewing on the episode today?
Chelsea Childs: Today, I am going to be joined by Jill Varner, who is the chief compliance officer of Versus Capital Advisors and the Versus Capital funds. We’ve been working with Jill for several years now, and she’s just been really fun to work with, and I’m excited to have her here with us today.
Megan Baca: How did you meet and start working together?
Chelsea Childs: Jill and I first started working together during the pandemic when Versus was a relatively new client of ours. We had been working together on their registered funds over Zoom—that’s primarily where we had interacted. Our first in-person meeting was a bit of a surprise because I had seen Jill—or the person I thought was Jill—on a plane from Denver to Reno. This is when everybody had to wear a mask on the planes, so we were both wearing masks, and just looking at her, I thought, “That face looks really familiar.” Versus Capital is based in Denver, so it made sense that it might be Jill, but I wasn’t sure given the mask and given the fact that I had never met her in person. After the plane landed and we were able to go out, I went up to her and said, “Hi, are you Jill Varner?” And sure enough, she was. So, that was the first time that we met, in the Reno airport—the first time we met in person.
Megan Baca: I’m impressed you could actually recognize her, to be honest, because I have met clients in person without a mask on and barely recognized them after being only on Zoom. I feel like some people just look very different in three dimensions. How have you worked together? What are some of the most noteworthy matters that you’ve worked on with Jill?
Chelsea Childs: We work with Versus Capital and Jill and her team on all aspects of their registered funds and their compliance program. We’ve been working with Jill, in particular, even before she was promoted to her current role of chief compliance officer. And recently, one of our very exciting initiatives that we’ve had the pleasure to help Versus with was launching an infrastructure fund that is an interval fund available to retail investors as well as institutional investors. Versus had a number of registered interval funds already, but this was the first fund that Jill had been participating in since its inception, since the two existing funds had predated her. So, that was exciting to be a part of and great that the team was able to get that off the ground.
Megan Baca: That sounds fantastic. Finally, before we turn it over to you and Jill, what would you say is most notable about Jill’s career?
Chelsea Childs: What has really impressed me about Jill is her ability to get up to speed on new rules very quickly, her ability to ask great questions, and she really absorbs things and applies them in a manner that somebody who had been in the industry and working on this for decades would do, and as a relatively young chief compliance officer, Jill operates at that level even now. So, that’s been most impressive working with her.
Megan Baca: Fantastic. So, with that, I will turn it over to you and Jill.
Chelsea Childs: Jill, thank you so much for joining us on this Women @ RopesTalk podcast. It’s been great to work with you over the last couple of years—you and the Versus team. I know you’re really relatively new in the chief compliance officer role at Versus and for the Versus Funds. Can you tell me a little bit about Versus and your role there?
Jill Varner: Thank you so much for having me, Chelsea, I really appreciate being asked on. Like you mentioned, I’m the CCO at Versus Capital Advisors and our interval funds. I took on the CCO role last July, but I’ve been with Versus coming up on five years now—I served as the deputy CCO previously. Versus is a Denver, Colorado-based asset management firm, and we’re really focused on building and managing investment products that are focused on the real asset space, with a particular interest in interval funds—so, “real assets” being real estate, infrastructure, farmland, and timberland are our primary focuses.
Chelsea Childs: One of the things that has been fun to follow is Versus on social media, like LinkedIn. I know either they’ve done a number of visits to orange groves or areas that are really interesting from an everyday perspective, not your typical what you think of when you think of “investment.” Have you been involved in any of those types of visits?
Jill Varner: Unfortunately, I haven’t made it out to some of our property tours that we’ve used in our marketing videos, but because we have direct exposure or indirect exposure to a lot of these assets, our teams have been on the ground on Christmas tree farm tours, orange groves, as you mentioned, tree nuts that we own, almond groves, and all sorts of different really interesting assets that have a direct tie to a truly tangible item.
Chelsea Childs: Yes, that’s a fun space. One of the other things that I really like about Versus and their media presence is I recently watched your latest episode of Chili and Chat, where you and the CEO were interviewed in a Hot Ones style. For those who don’t know Hot Ones, it’s a YouTube show where celebrity guests are interviewed over tasting different hot wings. And you had yours over bowls of chili from your office chili cookoff. Can you tell me a little bit about how that went, and how that idea was conceived?
Jill Varner: It was really a fun filming project, and also extremely spicy towards the end. We are a pretty small firm in terms of headcount—we’ve got only about 30 people. Every Friday, we order luncheon for the team, whoever’s in the office. We sit around, have a little bit of a “state of the union” in terms of what’s going on at work, but also socially, which is a really great touchpoint with colleagues you’re maybe not speaking with every single day. And so, our marketing team was chatting about the hot wings and what a funny interview format it is, and it just came up that since we’ve been delving into video production a little bit more on the marketing side, “Do we want to do a get-to-know-certain-individuals at Versus over very spicy food?” We’re kind of a competitive environment in some ways—we have all sorts of chili cookoffs, fitness challenges, and the like—and so, thus became the first Chili and Chat episode.
Chelsea Childs: I look forward to watching the other ones. You mentioned you had a relatively small team, and I know that before Versus had grown, you were the only woman on the Versus team. I was wondering what that experience was like for you, and if there were any lessons learned coming out of it or things that you’d like to share with other women who might be in similar situations.
Jill Varner: To kick off, I think everyone at Versus is great. I never felt alienated or anything like that being the only woman coming in. However, this industry—asset management in particular—can tend to be male-dominated, and you get in a lot of spaces where maybe you are the only woman, or you are the only person of your group that is represented. So, I think that it was something I considered before coming onboard at Versus—I met with a lot of people before I took the role. In recent years, we’ve actually hired a ton of women—roughly a third of the company is women now, up from just me. And it’s really been a great development to see a greater diversity in opinions, a greater diversity in approach towards work, and I think it’s strengthened the company, for sure.
Chelsea Childs: That’s great. Switching gears a little bit, I’d like to talk about your career path. What attracted you to the compliance area in the first place, and what was your path before joining the Versus team?
Jill Varner: If I’m being completely honest, I did not dream of being a compliance officer as a little girl, but, honestly, it’s just a career path that I think a lot of people aren’t aware of until you see that it’s there. So, I studied economics in college—I was always interested in finance and the markets. As I was interviewing for jobs when I first was fresh out of school, I interviewed for a compliance role at an expert network, and I really just clicked with the team and that was my intro to compliance broadly. From there, I spent several years at the expert network. I moved to Janus Henderson, where I served a role on the investment compliance team, more focused on supporting our research function, anti-market manipulation, and anti-insider trading controls. But what I really like about the compliance function is that you get to learn about so many different areas of the business, work with so many different people, and try to understand the business truly in a way that you can build appropriate controls that align with what the risks are that are facing the company.
Chelsea Childs: I assume the same is true about joining the investment management and asset management industry. It’s not something that you necessarily set out to do, but when it was exposed to you, you found that you liked it?
Jill Varner: Yes, definitely. Like I said earlier, I like learning new things, and I think that in asset management, there’s always something new to learn. On the compliance side, obviously there are always new rules and regulations, but I think there’s a vast amount of creativity in how products are developed. Obviously, the types of things that people are investing in is a constantly evolving space, so it’s never stale, it’s always something that the next thing is coming, and there’s always something exciting to look forward to.
Chelsea Childs: That’s really what I like about my job, as well—it’s a constantly evolving area, and the SEC is always keeping us on our toes, at least lately, with new rule proposals and things. The SEC has had a really fulsome rulemaking agenda in recent years that has impacted investment advisors and funds, both registered funds, like Versus products, and private funds. What have been some of the more impactful regulatory developments that you and your team have dealt with recently?
Jill Varner: I would say in the last few years, you’re right—it’s just been proposal after proposal, rule after rule. It just feels like it’s almost impossible to stay on top of all of the developments. I would say the valuation rule was a big development for us because of the nature of the interval fund structure and the way that we tend to invest in our interval funds. We fair-value a large percentage of our assets on a regular basis, and so, making sure that we had appropriate controls in place there that aligned with Rule 2a-5 was a big lift for our team here internally. Another interesting development was that while we are limited derivatives users, and not subject to the full scope of all of the new 18f-4 derivatives rule regime, there was an interesting piece of that rule that came out relating to unfunded commitments. And, again, given the nature of the types of investments that we make, we are making a number of unfunded commitments, so it really made us re-look at how we’re approaching that and documenting that we have sufficient liquid assets to cover any unfunded commitments.
Chelsea Childs: That’s a piece that we’ve also been focused on with a number of clients, because like Versus, others are looking to provide retail investors with exposure to asset classes that they might not otherwise get exposure to in a traditional mutual fund—so alternative retail products. So, this is something, you’re right, that has come up a lot as not an “unintended consequence,” but something that I don’t think many people realized would be a result of the derivatives rule.
Jill Varner: When you hear the derivatives rule is coming down the pipeline, it’s not something you necessarily think, “This is going to be such a hugely impactful piece of it,” but for the space that we’re in, it definitely is impactful.
Chelsea Childs: Switching gears again, I’d like to talk a little bit about your relationships and mentorships, both how you have been mentored and how you build and maintain mentorships with the folks that are on your relatively small but growing team. Is there anybody that has given you, in your path, a great piece of career advice, or other really valuable mentoring that you can share with us?
Jill Varner: Yes, absolutely. I think relationships are so important in your career. That’s not news to anyone, really, but before I get into the mentor-mentorship piece of it, I think in compliance, in particular, developing relationships outside of your department and with other people in the business functions is really critical to developing a culture of compliance. So, I think that it’s the perennial struggle of the compliance professional to be seen as the “no man” or have this tension between the business. I think if you can develop meaningful relationships with people in distribution functions or people in investment functions, it just allows everyone to feel like you’re working towards the same goals a little bit more than just always being the person that says, “No, you can’t do this.”
From a mentorship standpoint, I’ve absolutely had really important people in my career who have given me great advice. I think one of the most important pieces is to build relationships, and to build relationships with people who will advocate for you when you’re not in the room. Of course, you should advocate for yourself—it’s your career, you should own it—but I think when you have someone whom you see as a mentor who is willing to stick their neck out for you and put you up for opportunities that you’re not necessarily in the room for, that can be hugely impactful in your career.
Chelsea Childs: You’ve mentioned a number of times that Versus, while it has a small team, is continuing to grow, including in the compliance side. What are some of the ways that you have been managing the relatively large workload, with SEC proposals and other things coming down with your small but growing compliance team?
Jill Varner: That’s a great question. I think triaging things, to some degree. It’s impossible to leave work every day thinking, “I have everything tied up, and any new stuff that comes in tomorrow, I’ll deal with that.” Aside from strict regulatory requirements and deadlines, the way I manage it is that I have a rough framework that I use to prioritize what often feels like an endless to-do list. First, I look at what the risks are. If something’s a higher-risk item, or a lower-risk item, that will help me understand where it falls within my prioritization stack. I look at what the impact is to clients or fund shareholders. If it’s something that’s really impactful to them—ultimately, our responsibility is to our fund shareholders—we want to bump that up in prioritization. And then, lastly, understanding what the priorities of the business are. So, I think having a clean line to the founders of Versus and a clean line to people who are driving new business initiatives, and understanding what the priorities are there, can help us decide, “What do we want to focus our efforts on?”
Chelsea Childs: That makes sense. I imagine that that’s actually an area where having a smaller team is really valuable, because there isn’t all this red tape and layers of people between you and the more senior decision-makers, so you are able to get that transparency.
Jill Varner: Yes, definitely. I’ve never worked at a company as small as Versus before—and while we have structure in place, it’s definitely a flatter organization with really entrepreneurial spirit. And so, I think it’s the type of place where anyone can come with an idea and have a real honest discussion with anyone at any level, and that’s a really fun and creative environment to work in.
Chelsea Childs: That’s great. What are some of the long-term goals that you hope to achieve in your career, either in your current role at Versus or more generally long-term?
Jill Varner: I don’t know that I necessarily have a, “I am striving for this particular position”-type goal. For me, I think my long-term career goals revolve around continuing to learn. My background is definitely focused on the registered fund space, and so, as much as possible, I’d like to learn more outside of that space and kind of expand my horizons into different product lines. I think another thing that’s really interesting, and that will impact the compliance landscape in the future, is how technology impacts things. So, I always want to keep an eye on and continue to learn about new technology that allows us to do our jobs better and faster, and really frees us up to focus on more complex problems.
Chelsea Childs: Yes, that is something that is really evolving quickly with generative AI, and another thing that, as you mentioned, the SEC has also been focused on. While the ability to use these tools to make our jobs easier is getting more and more focus every day, it is something that the SEC has its eye on as well—so hopefully, we won’t see too much stifling, but get helpful innovation in that space.
Finally, I’d like to just close out by asking what advice you would give your former self when you were just graduating and getting ready to start your career?
Jill Varner: Something I’ve struggled with in my career is confidence, which, I think, is something a lot of women, in particular, struggle with. A mentor of mine told me years ago that, “When you walk into a room, people don’t want you to fail—they want you to succeed.” Just having that mindset and approaching problems with the framework that “others want you to succeed, and others expect you to know what you’re talking about” is a confidence booster that, I think, would help me.
Chelsea Childs: I like that a lot—that was good advice. I think that’s about all the time we have for today. Jill, it has been a pleasure chatting with you. Thank you so much for joining us. And I look forward to continuing to work with you and the Versus team.
Jill Varner: Great, thank you so much, Chelsea—I appreciate it.
Megan Baca: Chelsea and Jill—thank you both so much. And as always, thanks to our listeners. For more information about Ropes & Gray and our Women’s Forum, please visit ropesgray.com/women. You can also subscribe to this series wherever you typically listen to podcasts, including on Apple and Spotify. Thanks again for listening.