Hedging Investment Bets in the Financial Industry

When reading Jim Dondero’s biography, one meets a formidable and imposing persona. He is an entrepreneur in the financial industry, and has gotten a foothold in the collateralized capital lending solutions. His interest in fixed income has amassed him fifteen billion dollars’ worth of assets in his economic powerhouse, Highland Capital Management. Jim’s reputation has earned him a voice in major incorporations; Americans Airlines, and Texas Energy Company, after the latter declared bankruptcy.


He is not the normal heavy-hitter bigwig from Texas. Rather, he is an introvert, intuitive, critical thinker and perceptive. He hardly exposes his self-image. Nevertheless, his entrepreneurial strengths lie in his ability to think critically on how to get around debt transactions, turnarounds and new trends.


Through the Highland Global Allocation Fund ($ 894 million), HCM provides investors with financial aid at affordable interest rates. The fund shot up by twenty- nine percent in just a year, and is niched in the Morningstar’s Global Allocation class, but works totally different from its peers.


The average global allocation fund has virtually 400 stocks. On the contrary, the fund by Highland holds a little less than 200 securities. Forty percent of them can be put under different themes; from singularly owned ventures to multiple firms in the same industrial line. According to Mr. Dondero, it is ridiculous to place them under a single embodiment, because it won’t be viable. The fund’s recent theme is the reorganization of Vista Energy.


Dondero’s rich portfolio has the latency to produce formidable business disruptions. In 2014, Highland fund came atop the list of its peers, but its inclination to venture into energy forced it to assume a downward trajectory in 2015. It soon leapt back to the top in the following year.


About Jim Dondero


James Dondero was born in Hoboken, NJ. He took up Finance and Accounting at Virginia University with an ambition of becoming a Real Estate Industrialist. Things took a different turn, and his intentions deviated to credit. Five years after graduation, he was at the helm of American Express, managing a billion dollars’ worth of fixed income assets.


He co-founded Highland Capital Management in 1993 in Los Angeles, after merging with an insurance company. They later relocated to Dallas. In 2012, they turned their focus to Argentina after realizing that the business environment in the country was favorable.