With over 20 billion dollars under management, Highland Capital has returned to the position of strength that it held before the great recession struck a decade ago. At that time, there were a lot of naysayers in almost every type of market that a firm could be involved in.
Fortunately, time and solid management led by James Dondero was able to weather the storm and rebuild much of the market value that disappeared during that time. As a result, with a return to normal operations, Mr. Dondero and Mr. Okada, the founders, have been able to take on even more responsibility. Mr. Dondero was recently appointed chairman of the board of a Dallas REIT that he helped to found. His fellow new board member is none other than Arthur Laffer, one of the top economists of the last century.
At Highland, the company has forged ahead with plans to open new funds and opportunities. The firm has been known since the 1990’s for its focus on credit investment, specifically in the form of collateralized loan obligations, a concept that was really created and developed by Mr. Dondero and Mr. Okada.
The collateralized loan obligation is a way of allowing many different levels of investor to participate with varying levels of commitment and therefore, return. With three new funds going to the market recently, Highland is definitely committed to growing the amount of capital that it has under its management. The new funds are labeled global, event-driven, and equity hedge, which provides a precise description of the areas in which the company hopes to grow.
As with most of the funds that are created by Highland, Mr. Dondero and Mr. Okada have oversight over how they are created and what type of investments are made. Historically, they have a preference for mixing services with technology, medical, and chemical in order to provide the best return.
With the market continuing to thrive, there are plenty of firms that would like access to the type of capital that a collateralized loan obligation provides them with. This year, Highland Capital, with Mr. Dondero at the helm, should find plenty of CLO and investment options that come with balance sheets that should please even the most conservative investor.