James Dondero; The Investment Guru

James Dondero was interviewed by Barron’s Magazine for his role in the success of the Highland Global Allocation Fund. He was asked about the biggest reason for his success. He said that it was his ability to solve problems. This involves thinking through and deliberating on emerging trends, complex debt deals, and corporate turnarounds. The Highland Global Allocation Fund is worth $900 million. The fund offers investors inexpensive access to investment ideas recommended by Dondero. The fund was added to Morningstar’s world allocation category despite the fact that it does not resemble some of the other funds.

 

It holds half of the securities that the average funds hold. A huge portion of its assets is invested in one sector or company. Dondero defines them as themes. Some of the recent ones include Argentina and master limited partnerships in energy. The performance of the funds has risen and dropped several times in the last two years since it invests in few themes. The company started out at the top in 2014. It fell to the bottom after making early investments in energy in 2015. These early picks in energy eventually sent it to the top last year after they performed well.

James Dondero directed the fund’s efforts towards Argentina after news about its debt emerged in 2012. They made many trips to the country in the next two years to conduct research and analysis on the viability of the investment. The fund ultimately invested in the debt of the government and saw the bond price rise after the election of Mauricio Macri as president. The fund donates more than $3 million towards charities and non-profits each year. This is in line with its mission of transforming and improving the community.

 

Dondero is the president and co-founder of Highland Capital Management. Dondero attended the University of Virginia where he majored in accounting and finance. He is considered one of the pioneers of collateralized loan obligations. Dondero is a certified financial analyst. He held roles at other top companies such as JP Morgan, American Express, and Protective Life before founding Highland. Dondero is the chair of the boards of NexBank, CCS Medical, and Cornerstone Healthcare. He is the manager of NexPoint Credit Strategies and Highland Small-Cap Equity.

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