James Dondero Thrives In The High-Yield, High-Risk World

Corporate and Financial Executive James David Dondero has established a remarkable career by conquering the world of high-risk, high-yield investing. The Dallas, Texas-based entrepreneur currently serves as President of Highland Capital Management, the Global Credit Management company he co-founded in 1993. As the company’s leader Dondero presides over roughly $21 billion worth of assets.

Dondero’s thirty years in the investment business has been defined by thriving in high pressure situations and being involved with very large numbers. After graduating from the University of Virginia with dual degrees in Accounting and Finance, Dondero started his ascension in 1985 with American Express. In that year he was appointed to the position of Corporate Bond Analyst and Portfolio Manager. During a four-year stint with the company, Dondero was charged with the oversight of $1 billion worth of assets.

Dondero, a Certified Management Accountant (CMA) and Chartered Financial Analyst (CFA) assumed the title of Chief Investment Officer (CIO) upon his 1989 move to the life insurance and private investment corporation known as Protective Life. During this particular four-year assignment, Dondero managed $2 billion in assets. In 1993, Highland Capital was created. One of Dondero’s most noteworthy achievements while at Highland was his being at the forefront of establishing the Collateralized Loan Obligation (CLO). The CLO, also known as a Leveraged Bank Loan, is a type of lending practice in which a financial institution sells typically large, high-risk loans with the promise of high interest rate returns to individual investors. In most cases, the borrowers are companies that borrowed funds against their businesses to establish themselves. Assuming the borrowers fulfill their obligations, investors often yield high returns. Such a practice ensures banks assume less risk when assigning large business loans.

Dondero’s ingenuity and management style garnered he and his firm numerous noteworthy recognitions in 2014, including Morningstar’s 5-star Designation for Global Allocation, the Lipper Award for Floating Rate Opportunities, as well as being named Morningstar’s Number One Ranked Long/Short Equity Fund.

Aside from Dondero’s duties at Highland, he also serves as the Chairman of Cornerstone Healthcare and CCS Medical, a medical supply company and Nexbank, a financial services provider serving institutional clients, middle-sized companies and small businesses. In addition, Dondero sits on the Board of Directors at American Banknote, a company which engraves stock and bond notes and MGM Studios. Dondero is also affiliated with the TerreStar Corporation, a mobile communications provider; Neighbor Safe, Inc.; Safety-Kleen, a company offering environmental products and services and Leap Wireless International, Inc. Dondero is also a noted philanthropist, having donated large sums of money to causes like education and veterans affairs.