As the co-founder and president of Highland Capital Management, James Dondero knows how to gracefully navigate through the complex world of investing. Recently, his firm reached a cooperation agreement with RAIT Financial Trust, and it looks like the new agreement will work out well for all involved. A real estate investment trust, or REIT, RAIT Financial Trust provides commercial real estate financing throughout the United States. The gist of the new agreement is that following the certification of the vote at the annual shareholders meeting, a new trustee will be appointed. The trustee will be one of two candidates who have been recommended by Highland Capital Management.Before delving more into the cooperation agreement between Highland Capital Management and REIT Financial Trust, let’s consider the background of this development. First, it helps to understand what Highland Capital Management is and James Dondero’s role in the firm. Highland Capital Management is what is known as an alternative asset firm. Founded in 1993 by Dondero and Mark Okada, it was originally based in Los Angeles but has been headquartered in Dallas for many years now. In the years since its founding, Highland Capital Management has enjoyed many successes–and many of them are directly credited to James Dondero.
So, who is James Dondero? If you know anything about the world of finance and investing, you are surely familiar with the name. Born in Hoboken, New Jersey, the 54-year-old Dondero hit the ground running with his career many years ago. He attended the University of Virginia, where he studied accounting and finance. Originally, Dondero was interested in real estate investing. Within five years of graduating from UV, however, he was managing $1 billion in fixed-income assets for American Express. Since then, he has been involved in many prominent deals and has made a major name for himself.
In addition to having an educational background in accounting and finance, James Dondero has more than 30 years of experience in the credit market. He is regarded as being one of the early pioneers of Collateralized Loan Obligations, or CIOs. Dondero is a Certified Management Accountant, or CMA, and he has earned the right to use the Chartered Financial Analyst, or CFA, designation. Today, he serves on the board of directors for American Banknote and MGM Studios. He is also chairman of the board of CCS Medical Corporation, NexBank and Cornerstone Healthcare. One thing’s for sure: He always has plenty to do.Highland Capital Management’s dealings with RAIT have been going on for some time. Ultimately, the alternative asset firm possessed considerable holdings in RAIT Financial Trust. According to filings made with the Securities and Exchange Commission, Highland owned 5.9 percent, or 5,282,377 shares, of the trust. RAIT is best known for its innovative CRE lending platform that provides personalized lending solutions. Highland moved to acquire the fund, but there was back and forth for a while. In early 2017, a cooperation agreement was finally made, and it looks like there is a definite plan in place.
What does the plan look like? Essentially, it means this: After the certification of the vote at the 2017 Annual Meeting of Shareholders, RAIT will appoint a new trustee to the Board of Trustees. This new trustee will be one of two candidates that have been recommended by Highland Capital Management. In this way, James Dondero and the team believes that RAIT and HCM will be able to work and collaborate effectively together. It is believed that the cooperation agreement will strengthen the RAIT board and do a lot of good for a lot of people.It will be interesting to see how things progress with Highland Capital Management and RAIT Financial Trust. With James Dondero at the helm, however, you can be sure that everything will work out perfectly. Dondero has a very impressive track record, including the fact that as Chief Investment Officer of Protective Life’s GIC subsidiary, he grew the firm from a startup to a $2 billion company in the space of just five years. That is just one of many examples of the great successes that have been achieved by the talented Highland Capital Management co-founder and president. Stay tuned for more developments about the cooperation agreement to see what happens next.