Highland Capital Management, is one of the largest alternative credit managers in the United States. We handle over $14,8 billion of assets. We are specialists in various credit strategies, like long-only funds, distressed and special situations, Collateralized loan obligations, credit hedge funds and natural resource investing. Our clients include pension plans, endowments, corporations, governments and high net worth investors. Our headquarters are in Dallas, Texas. We also have offices in New York, Singapore, Sao Paulo and Seoul.
The company’s energy-stock picks helped Highland’s Small Cap Equity Fund nearly triple the return of the S & P 500 in 2016. The funds Class A shares, returned 31.6 percent last year. This fund is managed by Michael Gregory and James Dondero at the company.
Gregory said that Highland was able to invest in pipeline partnerships in early 2016 and just ride the wave back up as oil prices began to stabilize. Highland Capital was able to benefit from the dividend yields available in the industry when it was at the bottom.
Gregory feels that the decline in health care stocks, last year, will be a great source of gains in 2017. He cites the heal care problem of opioid addiction as one reason health care stocks should improve. He says that health insurance companies are on the fast-track to using new less-addictive pain relievers. This leaves the door open for drug manufacturers like Collegiate Pharmaceutical to profit from a new trend in pain killers.
Another company, Pacira Pharmaceuticals makes a non-opioid pain relief medication used for surgeries. The medication is injecting during surgery to help with pain relieve afterwards. The drug is doing over $200 million in sales currently.
Gregory also likes the multi-family real estate market. By purchasing properties and updating them, they can charge a higher rent. One example of the positive trend in this area is NexPoint Residential Trust which last year returned 79,5 percent. Gregory is looking at other companies with similar structures, like Independence Realty Trust. Morningstar rating service, puts the Highland Small Cap Equity Fund at four stars out of five for performance.