Highland Capital Management is on a roll. A roll in the investment business means the company is increasing the number of assets it has under management. The 2014, number was $21 billion assets under management, but that number grew to $28 billion thanks to a merger with another investment firm in 2015, according to co-founder James Dondero. Dondero was a high-profile executive with Protective life before he teamed up with Marc Okada and formed Highland Capital Management in 1993.
The company has grown substantially since then, thanks to Dondero’s experience in the investment industry as well as his unique ability to surround himself with competent people. His partner and CFO, Marc Okada of Highland Capital Management is a good example of his people skills. Dondero and his team have diversified their investment strategies and all of those strategies have been successful. The latest strategy, liquid alternative investments is a big deal for the company. Dondero is devoting manpower and a lot of investment knowledge to that strategy. Liquid Alternative investment funds are now functioning as a separate unit within the company.
The new unit started with $5 billion in alternative assets under management, so the company has a firm foundation to build on, according to Dondero of jimdondero.com. Liquid Alternative assets are one of the fastest growing segments of the investment industry. There are 500 alternative mutual funds in operation, and the combined total of assets under management in that group is more than $200 billion. There is a lot of interest from investors, and Highland Capital wants to turn that interest into returns.
Dondero has put Chief Investment Officer, Michael Gregory in charge of the liquid alternative investment platform. Gregory says the new platform is not about expanding the product line of alternative assets. Gregory thinks the current products are good enough to attract more investors, but he isn’t ruling out expanding the liquid product mix in the future. Gregory sais currents funds are the top priority this year.
Company president Brad Ross said the main objective of this new unit is to expand distribution. Ross went on to say that the current distribution through independent broker-dealer channels has been a good one, but the company wants to build a hybrid group that will do nothing but concentrate on independent financial advisors. Ross thinks that this new group will meet the changing demands of their clients.
The internal restructuring of the company will not impact current investors in Highland Capital’s mutual funds, but it a definite change in focus for the company, according to Ross. Highland Capital has six liquid alternative investment funds now. The funds are a mixture of healthcare and other key industries that compliment Highland Capital’s investment foundation.