There is a great deal of confusion out there about the recently approved cooperation agreement between Highland Capital Management and RAIT Financial Trust. As noted in the news, the cooperation agreement involves the appointment of two new trustees to RAIT’s Board of Trustees. These will be candidates who have been recommended by Highland Capital. James Dondero, president and co-founder of Highland Capital, has played an instrumental role in the situation. Therefore, to understand the story better, it helps to know more about Dondero and his fascinating career. You will then understand that the portfolio manager and president has more than enough experience and knowledge to navigate the situation effectively.As noted in the news, Highland Capital reported its holdings with RAIT Financial Trust to the Securities and Exchange Commission, or SEC, in November. The company disclosed that it owned almost 5.3 million shares, which is equal to around 5.9 percent. At the time, 115 investors owned shares of RAIT Financial Trust. RAIT is a real estate investment trust, or REIT. It offers a full-service commercial real estate lending platform that provides custom solutions. With the cooperation agreement, RAIT will appoint a new trustee who has been recommended by Highland Capital after the certification of the vote from the 2017 Annual Meeting of Shareholders.
As a part of the agreement, Highland Capital and its affiliates will vote their shares in support of electing a slate of trustees that has been recommended by RAIT at its annual board meeting. James Dondero and other senior members of the Highland Capital team are excited about this collaboration and believe that it will bring about many positive developments. It should also be noted that RAIT is required to appoint another recommended trustee within 120 days of the cooperation agreement.James Dondero founded Highland Capital Management with Mark Okada in 1993. He had already established a name for himself in the industry when this occurred. Dondero graduated with high honors from the University of Virginia in 1984. He earned a bachelor of science with a double major in finance and accounting from the McIntire School of Commerce. From there, he served as an analyst for the Morgan Guaranty training program. Next, he served as a corporate bond analyst for American Express, retaining that role from 1985 until 1989.
In 1990, Dondero and Okada embarked on a joint venture with Protective Life Insurance Corporation. Their initial efforts resulted in the founding of PAMCO–Protective Asset Management Company. PAMCO continued to be largely owned by Protective Life for some time. In 1997, however, Dondero and Okada bought the rest of the shares. The following year, they dubbed the new enterprise Highland Capital Management. The alternative investment management firm has been a pioneer in the industry from the very beginning. Most notably, James Dondero and his team are considered to be pioneers of the CLO, or collateralized loan obligation, market. Today, Highland Capital manages more than $18.7 billion in assets and is one of the biggest and most experienced alternative credit managing firms in the world. Independently owned and based in Dallas, Texas, the company also has offices in Seoul, Sao Paolo, New York City and Singapore.
James Dondero helped to achieve the cooperation agreement between Highland Capital and RAIT Financial Trust by putting his skills and experiences to work. In addition to having more than 30 years of experience in the credit and equity markets, Dondero currently serves as chairman of the board for Cornerstone Healthcare, CCS Medical Corporation and NexBank. He is also on the Boards of Directors of American Banknote and MGM Studios. Considering his extensive experience and credentials, it is surprising to most people that he is only 54 years old.How will the cooperation agreement between Highland Capital and RAIT pan out? All parties involved are very optimistic, but nothing will be certain until the vote occurs and the appointments are made. Given that portfolio manager James Dondero is involved, however, odds are that things will go very well for everyone. Without a doubt, this won’t be the only development involving Dondero and Highland Capital this year, so be sure to stay tuned for more information.