Highland Capital Management: A Third Quarter Of Change

In early February, Highland Capital Management filed their 13F for the third quarter of 2015. Octa Finance looked up the filing to analyze what had happened at Highland Capital during their third quarter. The article said that the fund sold out of several stocks. They got rid of their stocks in Laboratory Corp Amer Hldgs, Spdr Series Trust, Envision Healthcare Hldgs, Nexpoint Cr Strategies Fd and McKesson Corp, which accounted for about 8 percent of the fund’s portfolio. There was no reason for the sale but it most likely had to do with a better location for the fund’s capital, momentum or value.

The article also described what positions the firm had pulled back from. The firm reduced their position in Nrg Energy Inc, Ishares Tr, Anadarko Pete Corp, American Airls Group Inc and American Express Co. All of those stocks were reduced by between 17 percent and 77 percent. The article noted that overall, from the second to the third quarter the fund lost 1.49 billion dollars in value to their portfolio, which is worth roughly 15 billion dollars.

Highland Capital Management is based in Texas and was founded by James Dondero. There are 105 employees that work both part and full time. 35 of those employees are either investment researchers or investment advisors. The fund generally has between 26 and 100 clients. Jim Dondero founded the fund in 1993 and has now had more than 30 years of experience in equity and credit markets. Dondero had two goals for the company, first, to be a leader in creating credit based solutions to global investors, both retail and institutional. And second is to develop a market for collateralized loan obligation. The firm also offers private equity funds, hedge funds, mutual funds, CLOs, REITs and ETFs.

Jim Dondero started off by getting a dual degree in accounting and in finance from the McIntire School of Commerce at the University of Virginia. Dondero then went on to get certified as a Certified Public Accountant, as a Chartered Financial Analyst and a Certified Management Accountant. Dondero has also worked as an analyst, a corporate bond analyst, a portfolio manager and a Chief Investment Office for place like the Morgan Guaranty training program, American Express and the GIC subsidiary of Protective Life.

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