Highland Capital Management Invests Heavily in Credit and Equity Markets

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Highland Capital Management is a privately held investment advisor and management firm that manages distressed investments, structured investments, and hedge funds. The company invests in hedging markets, global public equity and fixed income, specializing in high yield bonds, leveraged loans, and structured products. For more than two decades now, Highlands has maintained high standards when handling investments especially the alternative investment.

 

The History of Highland Capital Management

Since its inception over 20 years ago, Highland Capital Management has grown to be among the biggest and most skilled alternative credit managers in the industry. The history of Highland Capital started way back in 1990 when its founders Mark Okada and James Dondero formed a joint venture with Protective Life Insurance Corporation. The venture dealt with fixed income markets such as the management of senior secured bank loans. The venture transformed into PAMCO or Protective Asset Management Company, an SEC-registered investment manager where the founding partners owned 40 percent and Protective Life owned 60 percent.

As the company started to become successful in 1977, Mark Okada and James Dondero bought Protective Life’s shares in PAMCO and came up with Ranger Asset Management, L.P. as an independent credit manager registered with the SEC. In 1998, the asset management company changed its name to Highland Capital Management, L.P.

In 2000, the firm established an alternative investment 40 Act platform, and in the same year, it established a commingled bank loan fund. The loan fund blends assets from several accounts. The fund is, therefore, subject to a reduced percentage of brokerage fees and smaller administrative costs compared to individual accounts. Highland investors whose assets are merged into a single account benefit from economies of scale, lower risk, diversification and professional money management.

Highland Capital Management continued to expand its product lines, and by 2004, they entered the mutual fund business thanks to the acquisition of Columbia Asset Management’s two floating rate funds. The firm’s activities continued to increase, and it later opened branch offices in Singapore in 2008 and another one in Seoul in 2011.

Besides the offices in Singapore and Seoul, Highland has its headquarters in Dallas, Texas and offices in New York, Florida, Tennessee, Alabama and Sao Paulo.

 

Investment Strategy

The firm’s investment strategy has progressively developed and advanced since it started operating more than two decades ago. Highlands uses extensive research across the portfolio, aimed at identifying investments with the highest possibility of return on different market sectors and asset classes.

The firm uses several strategies to determine the right assets to invest in as well as the portfolio’s risk targets. Some of the strategies Highland Capital Management uses include long-only credit, credit-oriented products, structured products, real estate, long/short equity and distressed and special situations strategies.

 

James Dondero Bio

James Dondero serves as the president of Highland Capital Management and has over 30 years of experience in the equity and credit markets, specializing in distressed and high-yield investing. He started his career in 1984, working for the Morgan Guaranty training program as an analyst. Dondero also worked for American Express as its Corporate Bond Analyst and later as the Portfolio Manager. He then served as the chief investment officer for Protective life where he played a key role in establishing GIC subsidiary.

Mr. Dondero holds a degree in commerce with a dual focus on finance and accounting from the McIntire School of Commerce which is a department of the University of Virginia. Besides being a credit and equity manager, Dondero participates actively in charitable activities that focus on public policy, education and veteran’s affairs.

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