At its upcoming 2017 Annual Meeting of Shareholders, RAIT Financial Trust will appoint a new trustee to its Board of Trustees. The new trustee will be someone who has been recommended by Highland Capital Management, which is helmed by 54-year-old portfolio manager James Dondero. This story has received a lot of coverage, and a lot of that has to do with the fact that Dondero is involved. With more than 30 years of experience and success in the credit and equity markets, Dondero is the kind of person who tends to make waves wherever he goes. Learn more about the cooperation agreement that he has reached between Highland Capital and RAIT by reading on below.Before taking a closer look at the aforementioned cooperation agreement, let’s back up a little. To better understand everything, it helps to have some knowledge of the background of not only the companies involved but of James Dondero as well. Dondero was born in Hoboken, New Jersey. He was always a hard-working student, and he attended the University of Virginia during the early 1980s. He graduated from UV’s McIntire School of Commerce in 1984 with high honors and a dual major in finance and accounting. Needless to say, he came away with the educational credentials that he needed to hit the ground running.
In 1984, James Dondero took his first job in the industry as an analyst in the Morgan Guaranty training program. Just a year later, he started on as a corporate bond analyst for American Express. During his time there, he managed around $1 billion in fixed-income funds for the corporation. From 1989 to 1993, Dondero established Protective Life’s subsidiary, GIC, growing it from a startup to a company that was worth more than $2 billion in just five years.Everything really changed for James Dondero in 1993 when he founded Highland Capital Management with Mark Okada. Originally, the alternative asset firm was based in Los Angeles. For a variety of reasons, including tax purposes, the founders relocated the firm to Dallas, Texas, where it has remained ever since. Highland Capital stands out in many ways. Its primary focus is on high-yield and distressed investing. The company really made a name for itself as a pioneer in the CIO, or Collateralized Loan Obligation, market. As a result, James Dondero is closely associated with CIOs and is vastly knowledgeable about them.
In November 2016, Highland Capital disclosed information about its holdings in RAIT Financial Trust to the Securities and Exchange Commission. At that time, the alternative asset firm held around 5.9 percent of the trust’s outstanding common shares, which was equal to nearly 5.3 million shares. RAIT, a national direct lender to owners of commercial real estate, or CRE, offers a full-service CRE lending platform that produces customized lending solutions for its clients. In May, RAIT entered into a cooperation agreement with Highland Capital in an attempt to sort out the issues regarding the Board of Trustees.Because of the cooperation agreement, Highland Capital Management and RAIT Financial Trust will collaborate and work together.
When everything is said and done, two new trustees who have been approved by Highland Capital and James Dondero will join the board. The first one will be appointed after the certification of the vote that occurs at the 2017 Annual Meeting of Shareholders. Within 120 days of the agreement, a second trustee will be appointed and will join the board. Meanwhile, Highland Capital and its affiliates have agreed to vote their shares to support the election of a slate of trustees that has been recommended by RAIT’s board during its annual meeting.While much of James Dondero’s time is spent focusing on Highland Capital and its activities, he is involved with many other organizations as well. A certified management accountant and chartered financial analyst, Dondero serves on the Board of Directors of American Banknote and MGM Studios. He is also the Chairman of the Board of CCS Medical Corporation, NexBank and Cornerstone Healthcare. He and his team at Highland Capital are optimistic about the recent agreement with RAIT. It will be interesting to see what comes out of their collaboration. No matter what happens, you can be sure that James Dondero will handle everything strategically.