James Dondero has had a long and illustrious career in the finance and credit markets, rising to the status of one of the most successful hedge fund investors in the country. However, this rise in the hedge fund and alternative investment circles has taken both passion and bold but well-calculated bets in every investment move. These are characteristics he adopted early in life and which have set the Highland Capital co-founder and CEO on a constant trajectory up the success ladder.
How did James end up in the hedge fund business?
Interestingly, James Dondero had planned to pursue the real estate markets after graduating from the University of Virginia where he majored in Accounting and Finance. However, an economic downturn of the early 1990’s shifted his focus to credit management. He quickly mastered the credit advancing and management trade, and within five years after graduation, James was managing over $1 billion fixed-income investments for American Express. His experience with the corporation inspired him to start a credit and alternative investment company after which he partnered with Mark Okada to set up Highlands Capital in 1996. Read this article at barrons.com.
The process of turning a simple credit line into a $15 billion powerhouse hasn’t been easy. Unlike most other alternative investment firm’s managers, he has taken blatantly bold bets that had insignificant burns and a lot of winning. This boldness has defined James Dondero’s tenure at the helm of the ever-rising alternative investment company. James is particularly known to invest in deals that most fund managers consider off-limits.
For instance, in 2014 James pulled Highland capital into investing in Vista energy in Texas that was already riding on a $40 billion debt. The move attracted, even more, attention since Berkshire Hathaway had lost nearly half of their $2 billion investment in the company a year earlier. However, the company has already turned around its fortunes, posted post-bankruptcy earning calls and even had debut shares on the NYSE.
A similar bold bet includes the investments in hard-hit Master Limited Partnerships owning Oil and natural gas refineries in Argentina. These MLPs had reported a historical downdraft in 2015, but Highland capital still invested close to 15% of its fund in more than a dozen of such MLPs. They have since reported profitability of over 18$ with some quadrupling the initial investment. Read more about James at Crunchbase.