James Dondero and Collateralized Loan Obligations
Jim Dondero and Mark Okada helped pioneer the use of Collateralized Loan Obligations (CLO) while creating Highland Capital Management with Mark Okada in 1993. CLOs are a diversified pool of broadly syndicated, senior secured, corporate bank loans typically financed through the issuance of AAA to BB rated debt and an equity tranche.
Highland executes its CLO management business through its affiliate specialized in structured credit, ACIS Capital Management. Jim Dondero’s Highland Capital Management, together with its affiliates, is the largest US CLO manager by AUM, and has structured and monitored 39 CLOs/CDOs with over $31 billion in total assets.(1)
James Dondero’s CLO theses utilizes a continuous risk management process with active top-down portfolio rebalancing. Acis CLO Insight™ integrates thorough credit analysis with underlying credits under review for quick and accurate fundamental analysis. Jim Dondero works with the CLO team to conduct a detailed investment process which includes analysis, benchmarking, documentation review, liquidity analysis and formalized fundamental analysis. Optimized trading execution and sourcing new CLO ideas are also utilized to create additional alpha.
- Source – Moody’s CLO Interest News Letter, June 2014