Jim Dondero Uses Unusual Investment Strategy to Outperform the Markets

Jim Dondero is the co-founder of Highland Capital Management, which he started in 1993. He has proven to be a visionary when it comes to the markets and how to make money consistently. He built up a $15 billion alternative investment company over the years. Jim has found value where many have lost money. Jim claims that his success has come from thinking through debt issues, turnarounds and new trends.


Dondero was one of the early investors in collateralized loan obligations. Many consider him to be introverted, intuitive and an intense thinking. He spends time thinking about every aspect of an investment opportunity and usually makes the right decision pertaining to it. Jim offers investors access to a mutual fund, with some of his investment ideas, the Highland Global Allocation fund. The fund gained 29 percent in value over the past 12 months. The fund is more concentrated than typical mutual funds, and sometimes focuses on just a few sectors. This can cause major swings in value of the fund. Jim wants to go for the gusto, rather than provide another plain vanilla fund.


Jim Dondero focuses a large portion of his investing on fixed income and credit markets. He says he prefers a defined flow of cash rather than a build it up theme. The company has specific analysts who cover high conviction ideas. The rest of the team is focused on specific sectors of the market. Jim allocates about 50 percent of his portfolio to diversified assets. The other 50 percent is concentrated on key ideas he has selected.


In 2012,James Dondero and his team started investigating the debt of Argentina, which was having trouble. They felt that the country was ready for a recovery and in 2014 they put 24 percent of their assets in the country’s debt. In late 2015, the recovery began. They made a profit of over 60 percent on that portion of their portfolio.


In addition to running a successful investment company Jim Dondero is big in philanthropy as well. Reasoning Mind is a technology based math curriculum Dondero offers to pre-kindergarten kids through seventh graders. The program has helped raise math scores in some of the poorer schools in areas where math teachers are not even available.

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