There’s been a lot of talk lately about interactions between James Dondero and RAIT Financial Trust. Unfortunately, this includes a lot of speculation that is unfounded and unfair. The reason that James Dondero is being associated with RAIT Financial Trust so often these days is because he is the president and co-founder of Highland Capital Management. The Dallas-based alternative investment management firm recently entered into a cooperation agreement with RAIT. The details of this agreement are more closely outlined in the article that is linked on this page. At any rate, the only way to gain a clear understanding of the interactions between RAIT, Highland Capital and James Dondero is by knowing more about the latter in particular.First, though, let’s take a closer look at Highland Capital Management. Today, this alternative investment management firm manages more than $18.7 billion in assets and is one of the largest and most respected alternative credit managers in the world. In addition to its headquarters in Dallas, Texas, the company has offices in New York City, Seoul, Singapore and Sao Paolo. Across the world, the company employs more than 180 people. James Dondero has been the president of the company since its founding in 1993.
The story behind the founding of Highland Capital is pretty interesting. In 1990, James Dondero and his business partner, Mark Okada, entered into a joint venture with the Protective Life Insurance Corporation. This venture was named PAMCO, which stood for Protective Asset Management Company. It continued to be largely owned by Protective Life until 1997, when Dondero and Okada bought out the company’s stake. The following year, they changed the name to Highland Credit Management. The company has made a name for itself in many ways, including through its pioneering work in collateral loan obligation, or CLO, markets.Highland Capital Management specializes in complex debt deals, emerging trends and turnarounds. The company manages a variety of products, including hedge funds, private equity funds, CLOs, mutual funds, ETFs, institutional separate accounts and REITs. In November 2016, Highland Capital filed paperwork with the Securities and Exchange Commission revealing its holdings in RAIT Financial Trust. According to the filing, Highland Capital possessed 5,282,377 shares of the company, which means that it owns 5.9 percent of RAIT Financial Trust. As a result, James Dondero and Highland Capital sought representation on RAIT’s Board of Trustees. This is why the cooperation agreement became a necessity.
The conditions behind the cooperation agreement were worked out over a period of several weeks. Ultimately, the agreement is as follows. Following the certification of the vote that is taken at RAIT’s 2017 Annual Meeting of Shareholders, RAIT will appoint a new trustee to the board. This trustee will be one of two candidates who have been recommended by Highland Capital. The second candidate that is recommended by Highland Capital will be appointed to the board within 120 days of the time that the agreement was reached. Highland Capital and its affiliates will vote its shares in favor of the election of a slate of trustees that has been recommended by RAIT.How did James Dondero make it to where he is today in his career? The Hoboken, New Jersey native attended the McIntire School of Commerce at the University of Virginia. He graduated from that institution with high honors and a duel major of accounting and finance in 1984.
That same year, he accepted a position as an analyst for Morgan Guaranty Training Program. This set the stage for him to move over to a position as a corporate bond analyst for American Express. He remained in that capacity until 1989, and his work establishing Highland Capital began the following year.James Dondero has done a lot to make a name for himself during his more than 30 years in the equity and credit markets. At just 54 years of age, he still plans to stay active in his role at Highland Capital for many years to come. He also currently serves as the Chairman of the Board for NexBank, CCS Medical Corporation and Cornerstone Healthcare, and he’s on the Board of Directors for MGM Studios and American Banknote. He also supports emerging non-profits through a $300-million donor-endorsed fund that provides $3.5 million in funding per year. Learn more : https://www.crunchbase.com/person/james-dondero