Highland Capital Management: Changing Directions

Highland Capital Management was founded by James Dondero. He founded the fund with a philosophy that had 3 principles: Discipline, experience and boldness. The fund shows its discipline through its investment practices. It keeps an “alpha-by-avoidance” policy. Highland Capital Management makes sure to know how to quickly identify and leave losing investments. The fund shows its boldness by advocating for its investors and remaining independent by being employee owned. The fund shows its experience from 20 years of successful investment. The fund is one of the most experienced in alternative credit managing and has been tested by several credit cycles.

James Dondero has been active in the investment world for more than 30 years. Before he founded Highland Capital Management, he spent 4 years helping the GIC subsidiary of Protective Life to reach 2 billion dollars, as Chief Investment Officer. Before Jim served as CIO, he worked at American Express, where he oversaw 1 billion dollars in investments as a corporate bond analyst and then a portfolio manager for 4 years. Prior to his time at American Express, Jim Dondero got experience as an analyst for a year with the Morgan Guaranty training program, which he joined right after graduating with a dual degree in accounting and finance from the University of Virginia.

Prior to the third quarter, the fund was heavily invested in finance and health care. Over the course of the third quarter, the investments in health care decreased by 20 percent down to 683 million dollars and investments in health decreased by 38 percent down to 615 million dollars. The firm put that withdrawn money into other sectors. They now have 615 million dollars invested in information technology, 410 million dollars invested in energy, 341 million dollars in consumer discretionary, 273 million dollars in the transport sector, 136 million dollars in the utilities and telecommunications sector, 34 million dollars in materials and 34 million dollars in services. With this type of portfolio, the fund is now more evenly spread out among the various sectors rather than its heavy investment in two sectors.

For those who would like to read further, find the full article here: http://www.octafinance.com/highland-capital-management-top-10-holdings-in-q3-2015/352793/

One comment

  • Jerry
    January 1, 2017 - 8:10 pm | Permalink

    Octa Finance decided to do an analysis of Highland Capital Management’s 13F. The 13F was from the fund’s third quarter of 2015 and revealed some major sector changes with the fund’s investments. I have proof that the research paper writer was involved in over writing that sector.

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