There’s been a lot of buzz lately about the recent cooperation agreement that was struck between Highland Capital Management of Dallas, TX, and REIT Financial Trust. James Dondero, co-founder and president of Highland Capital, is reportedly optimistic and satisfied with the way that things have unfolded. As noted in the article that is linked to on this page, the cooperation agreement stems from an SEC filing that was made by Highland Capital in November 2016, whereupon it disclosed its current holdings of RAIT Financial Trust. Several months later, in May 2017, the cooperation agreement was reached. Once RAIT holds its Annual Meeting of Shareholders, new trustees will be appointed to the board as planned.
So, what is so significant about the cooperation agreement between Highland Capital and RAIT Financial Trust? Essentially, it ensures that both entities have sufficient representation on the Board of Trustees moving forward. In the SEC filing that was made in November, Highland Capital revealed that it held 5,282,377 shares of RAIT, which is equal to 5.9 percent. James Dondero and Highland Capital therefore decided that trustees that they have approved should be added to the board. This resulted in negotiations and other dealings that went on for a few months’ time.The cooperation agreement that was entered into between Highland Capital and RAIT Financial Trust accomplishes a few things. First, it means that after the certification of the vote that is held at the 2017 Annual Meeting of Shareholders, RAIT will appoint a new trustee to its Board of Trustees. The new trustee will be selected from one of two candidates that have been recommended by James Dondero and Highland Capital. The second candidate will be appointed within 120 days of the date on which the cooperation agreement was made. Highland Capital and its affiliates have also agreed to vote their shares in support of the election of RAIT’s recommended slate of trustees.
James Dondero was instrumental in striking this agreement with RAIT. RAIT Financial Trust is a real estate investment trust, or REIT, that provides direct financing to owners of commercial real estate, or CRE, across the United States. RAIT distinguishes itself in many ways, including the fact that it offers a convenient, full-service online lending platform that facilitates customized lending solutions for a variety of clients. Given this information, it is easy to see why Highland Capital has such a vested interest in the trust.If you are at all familiar with the worlds of portfolio management and alternative asset investing, you are surely familiar with James Dondero. The president and co-founder of Highland Capital Management, Dondero has a long and impressive track record. It all began with his education. Following high school, the native of Hoboken, NJ, attended the University of Virginia’s McIntire School of Commerce. He graduated from that school in 1984 with a bachelor of science and high honors in a double major of finance and accounting. That same year, he assumed a role as an analyst in the Morgan Guaranty training program.
James Dondero’s professional career really took off the following year, when he took a position as corporate bond analyst for American Express. He stayed there until 1989. This is when he and his partner, Mark Okada, embarked on a joint venture with Protective Life Insurance Corporation that first evolved into PAMCO–Protective Asset Management Company. It continued to be partly owned by Protective Life until 1997, when the partners bought out the company’s stake. The venture was renamed Highland Capital Management the following year. It should be noted that James Dondero helped to grow PAMCO from a startup to a $2-billion company in the space of just five years.In addition to having an impressive educational pedigree and exceptional business experience, including more than 30 years in the credit and equity markets, James Dondero current serves on the Boards of Director for American Banknote and MGM Studios. He is also Chairman of the Board of Cornerstone Healthcare, CCS Medical Corporation and NexBank. He is a certified management accountant, or CMA, and he has also earned the right to use the Chartered Financial Analyst, or CFA, designation. Keep checking back for new developments regarding Highland Capital Management, RAIT Financial Trust and James Dondero.