James Dondero, Highland Capital Management and RAIT Financial Trust

If you follow the world of finance and investing at all, you have probably been hearing a lot about James Dondero. The co-founder and president of Dallas-based Highland Capital Management, he and his alternative asset firm recently reached a cooperation agreement with RAIT Financial Trust, a real estate investment trust, or REIT, that specializes in providing direct financing to owners of commercial real estate, or CRE. This came about after Highland Capital disclosed its holdings back in November. Under the terms of the agreement, following RAIT’s 2017 Annual Meeting of Shareholders, a new trustee that has been recommended by Highland Capital will be appointed to the Board of Trustees.Highland Capital Management is a $15 billion alternative asset firm and hedge fund based in Dallas, Texas. The firm employs more than 100 people and was founded by James Dondero and Mark Okada in 1993. Highland Capital primarily focuses on complicated debt deals, turnarounds and emerging trends. As of November of 2016, Highland Capital owned almost 5.3 million shares in RAIT Financial Trust, which is equivalent to about 5.9 percent of the trust’s outstanding common shares. This was disclosed to the Securities and Exchange Commission. Through the cooperation agreement, RAIT will retain its desired trustees but will approve the appointment of two new trustees that have been recommended by Highland Capital.

One reason that this story is getting so much attention is because it involves James Dondero. The well-known and highly regarded portfolio manager has enjoyed one of the most illustrious investing careers in recent memory. Born in Hoboken, New Jersey, he attended the University of Virginia, where he focused his studies on finance and accounting. When he was young, Dondero thought that he wanted a career in real estate investing. Barely five years out of college, however, he was managing more than $1 billion in fixed assets for American Express, and his career in investing was well under way.Of course, Dondero’s involvement with Highland Capital and American Express is just the tip of the iceberg. He has accomplished many notable things during his more than 30 years in the credit market. One of the original pioneers of Collateralized Loan Obligations, or CLOs, he also served as Chief Investment Officer for GIC, a subsidiary of Protective Life. In that role, he grew the organization from a startup to a company that was worth more than $2 billion–and all of that occurred in the space of just five years.

At the time of Highland Capital’s disclosure to the SEC, 115 investors were reported to own shares in RAIT Financial Trust. RAIT is a real estate investment trust, or REIT, that provides direct loans to owners of commercial real estate, or CRE, around the United States. Around 25 percent of Highland Capital’s portfolio is in the finance sector, so it makes sense that James Dondero and his firm would be interested in RAIT. RAIT is innovative in many ways. Most notably, they offer a full-service lending platform for CRE through the internet.James Dondero isn’t just the president and co-founder of Highland Capital Management. He is actively involved with many other corporations and organizations. Today, he serves as Chairman of the Board for Cornerstone Healthcare, CCS Medical Corporation and NexBank. He is also on the Boards of Directors of MGM Studios and American Banknote. Dondero is a Certified Management Accountant, or CMA.

He has also credentialed to use the Chartered Financial Analyst, or CFA, designation. The ambitious portfolio manager is regarded as a leader in the industry, and he regularly assists aspiring portfolio managers and others with their careers.Once the Annual Meeting of Shareholders for RAIT Financial Trust occurs, more information about their agreement with Highland Capital Management will be available. In the meantime, it will be interesting to see how everything gets organized and falls into place. As a part of the agreement, Highland Capital and James Dondero have agreed to vote their shares in support of electing a slate of trustees that have been recommended by RAIT to the board. In this way, both parties are gaining a lot out of the agreement. Dondero is particularly excited about collaborating with the real estate investment trust and believes that Highland Capital will benefit enormously. Also visit : http://www.jamesdonderodallas.com/james-dondero/

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