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James Dondero: The Midas Touch


Everything that Jim Dondero touches turns to gold, after reading this you might come to the same conclusion as I have. The man serves as President, Portfolio Manager and Managing Partner of Highland Capital Management, L.P, which he co-founded in 1993 and deals with private equity trades. It doesn’t stop there, Jim then became the President, Co-Founder, Portfolio Manager, Managing Partner of NexPoint Capital, Inc. In 2014. In February the same year Mr. Dondero became President of Realty Trust company, Nexpoint Multifamily Inc and currently holds various other positions in its affiliates. He also holds the post of Chairman on the Board of Directors of HCM Acquisition Company.

Through Highland Capital Management L.P, Mr. Dondero has overseen the roll-out of award winning services and products. They include hedge funds, mutual funds, CLOs, institutional separate accounts, ETFs, private equity funds and REITs. Highland Capital Management was the first company to launch the first collateralized loan obligation (CLO) in 1996, the first non-bank CLO in the market. Under the leadership of Mr. Dondero, the company has designed and supervised 39 CLO’s with an approximate value of $32 billion in asset value. These CLO’s were largely unaffected by the 2008 financial market slump.

This is because CLO’s are a security supported by a pool of debt, often low-rated commercial loans. In this plan the investor receives their planned debt payments from the primary loans but takes up most of the risk if the borrower defaults. The securities provide the investor with a greater range and thus the potential for higher returns. Banks then sell various CLO with their various ranking according to risk/rewards they carry. This is a far contrast to the fate of collateralized debt obligations (CDO) in that period.

Riding on the success of CLO’s Highland went on to launch the company’s first total return strategy focusing on distressed assets. The company also established two bank loan discrete accounts for large public pension plans in Canada and the U.S., Years later the company continues to aid investors attain their risk and return objectives. This is through value-oriented investment means and fresh strategies. This arsenal of strategies include a variety of retail and institutional involving various approaches that include: Distressed for control of private equity funds, emerging markets credit funds, long-only credit funds, long/short equity funds, oil & gas funds and credit hedge funds.

Dondero also holds various other positions in various Companies namely; Prospect Street Income Shares Inc. where he serves as Chairman and Director, a post held since July 2001. James also serves as the Chairman of, Cornerstone Healthcare Group Holding, Inc., Cornerstone Healthcare Group and CCS Medical. Since 2001, Mr. Dondero has been the Director of several companies: NeighborCare, Inc. in 2001, American Banknote Corporation since October 2002 and most recently in 2010, Safety-Kleen. James also serves as a Director at Metro-Goldwyn-Mayer and MGM Holdings Inc.

James success can be traced back to his years at the University of Virginia where he graduated with the highest honors and majored in Accounting and Finance. Mr. Dondero is also a Certified Management Accountant (CMA).

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