Highland Capital Management

Highland Capital Management is an alternative investment management firm that manages hedge funds, structured investment vehicles and mutual funds. The firm invests in global public equities, as well as fixed income markets with a focus on leveraged loans, high yield bonds, and structured products.

This article is about the alternative investment management firm. For the venture capital firm, see Highland Capital Partners.
Highland Capital Management
TypePrivate
IndustryAsset management
Founded1993 (1993)[1]
FoundersJames Dondero, president[2]
Mark Okada, CIO[3]
HeadquartersDallas, Texas, United States
Key people
James Dondero
Mark Okada
Trey Parker
ProductsInvestment fund
Hedge fund
Mutual fund
Total assets$8.3 billion[4]
Number of employees
115
Websitewww.highlandcapital.com

The firm is headquartered in Dallas, Texas.[5] It also operates offices in New York City, Sao Paulo, Buenos Aires, Seoul and Singapore. Highland reported approximately $13.9 billion of assets under management in 2018.[6]

In October 2019, Highland Capital Management filed for Chapter 11 bankruptcy protection.[7]

Overview

Highland Capital Management was founded in 1993 by James Dondero and Mark Okada.[8] The firm was responsible for designing the first software to electronically track loan portfolios, which is used by a majority of loan managers.[9] Highland sold the software to JPMorgan Chase in 2003. In April 2004, Highland entered the mutual fund space with its acquisition of Columbia Management Advisors' bank loan mutual fund business.[10] The company acquired NexBank in 2004.[11] In April 2005, Highland acquired ING Capital Management. The acquisition marked Highland's first move into Europe.[12]

Highland Capital Management has been involved in a number of high profile bankruptcies and reorganizations related to distressed debt investments. Highland was involved in the bankruptcy of Bridge Information Systems in 2001.[13] Highland worked with Delphi Corporation through Delphi's reorganization in December 2006.[14]

In 2011, Highland moved its offices from the Galleria in far north Dallas to the Crescent Complex uptown.[15] Highland is a founding benefactor of the George W. Bush Presidential Center and, in early 2018, the firm provided the center with a $10 million endowment to back a series of public programs.[16]

Investments

Highland manages the Highland Floating Rate Opportunities Fund (NYSE: HFRO), among other closed-end funds. The company launched its first European regulated fund in 2014, the BB Highland Floating Rate Fund, through Banco do Brasil. The new fund, launched as an Irish Qualified Investor Fund, was built to replicate the previous Highland Floating Rate Opportunities Fund which Morningstar named the number one Bank Loan Fund for one, three and five year periods among 213, 168 and 111 funds. Highland's Fund Class Z won the Lipper Award in 2014 for Best Loan Participation Fund over three years.[17]

In February 2010, the firm announced the completion of its CLO Value Fund I, which was launched in November 2008 to invest in secondary CLO debt and equity.[18] Highland launched the Highland/iBoxx Senior Loan ETF in November 2012. In June 2018, the firm launched a UCITS fund focused on collateralized loan obligation (CLO) debt.[19]

Highland Capital Management Fund Advisors is an investment adviser and subsidiary of Highland, which is registered with the SEC.[20] HCM Fund Advisors works with investment companies and manages equity, fixed income and balanced mutual funds. HCM Fund Advisors also manages exchange-traded funds (ETFs) based on research from Hedge Fund Research, Inc. The first three ETFs launched by the company and traded on the New York Stock Exchange were Highland HFR Global ETF, Highland HFR Event Driven ETF, and Highland HFR Equity Hedge ETF.[21]

The Highland Global Allocation Fund was valued at $947 million in September 2016.[22] In August 2018, Highland acquired Cityplace Tower from Parmenter Realty Partners and Angelo, Gordon & Co. The transaction was one of the largest building sales in Dallas in 2018.[23]

References
  1. "Highland Capital Management, L.P." Harvest. Hvst.
  2. Jeff Bounds. "Hedge Funds Get Transparent". D Magazine Partners, Inc. D Magazine.
  3. Azam Ahmed. "Once-Burned, Highland Is Bullish on Debt". The New York Times. Dealbook.
  4. "Highland Capital Management AUM 13F". Retrieved 22 April 2019.
  5. "Making Bold Bets on Alternative Investments—and Winning". Barron's. 25 March 2017. Retrieved 17 January 2018.
  6. "Highland bolsters sales team as it gears for distressed cycle". HFM.
  7. "Highland Capital Management files for Chapter 11 bankruptcy: court filing". Reuters. 16 October 2019.
  8. "Making Bold Bets on Alternative Investments—and Winning". Barron's. 25 March 2017. Retrieved 17 January 2018.
  9. Pierre Paulden (September 17, 2007). "In the Eye of the Storm". Institutional Investor. Retrieved May 21, 2019.
  10. "Highland Capital Management acquired Columbia Management Advisors'". Pensions & Investments. April 15, 2004. Retrieved May 21, 2019.
  11. Perez, Christine (Aug 28, 2005). "Banking on a new name, more space". Dallas Business Journal.
  12. "Europe: Capital Management Unit Sold". The New York Times. 6 April 2005.
  13. Bridge Information Systems Files For Bankruptcy-Law Protection
  14. Hedge Fund Offers Plan to Reorganize Delphi
  15. "Highland Capital moving to Uptown from Far North Dallas". Dallas News.
  16. Haber, Holly (15 January 2018). "Bush Center starts off 2018 with pair of $10 million gifts from Highland Capital, Boeing". The Dallas Morning News. Retrieved 17 January 2018.
  17. "Highland Capital Management Launches Floating Rate Fund with Banco do Brasil". Funds Society. April 9, 2014. Retrieved May 21, 2019.
  18. Highland Capital Management, L.P. Completes CLO Value Fund
  19. Highland Capital offers European investors new kind of exposure to CLOs
  20. Highland Capital Management Names Jim Dondero as Senior Portfolio Manager to Energy MLP Fund
  21. Highland Capital Management Launches Three ETFs
  22. "Surge in passive strategies will be boon – Hedge fund executive Okada". Reuters.
  23. "Dallas' landmark Cityplace Tower has a new owner with big plans for the high-rise". Dallas News.
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