How Jim Dondero’s Assertive Investing Pays Off

Jim Dondero of Highland Capital Management, L.P., is not someone that at first blush you would think is a person who makes bold investing choices. He is very modest and comes across as unassuming. However, his ability to make daring investment decisions in one of the key reasons that the company has been so successful investing in alternative investments. Two of his big calls recently were in Argentina as well as master limited partnerships after those had been hard hit. He is the President of the company as well as one of its co-founders.

In 2012 during the midst of Argentina’s debt disaster, Jim Dondero started heavily researching the country’s situation. After several trips over two years, he and his team determined that the country would turn things around due to Argentina’s rich natural resources, educated populace, and strong infrastructure. He took a large position in the country’s sovereign debt, up to almost 25% of one his fund’s assets. This paid off very well when the bonds that Highland Capital Management has bought for 70 cents on the dollar each ballooned to 120 cents on the dollar.

Around the same time he started investing in Argentina, Jim Dondero saw an opportunity with master limited partnerships (MLP) being a great investment. Usually these trade in correlation with the price of oil and gas, however, they had dramatically gone down far more than the price of gas and oil had. MLPs don’t pay out based on the price of gas and oil but instead on how much volume flows through the pipes. Jim Dondero put a large amount of investment into MLPs which quickly paid off with a huge return of 18.3%.

James Dondero has been in the financial industry for over three decades. He co-founded Highland Capital Management in 1993 and was instrumental in the company’s initial success investing in collateralized loan obligations. He is deeply experienced in alternative investing including REITs, ETFs, hedge funds, and private equity funds.

It was in 1984 that Jim Dondero first started in the industry, working as an analyst at Morgan Guarantee. He had also worked for American Express and Protective Life before forming his own company.



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