Highland Capital Management from Dallas, Texas takes the phrase very seriously. Don’t be fooled, though they only have one hundred employees and four offices (their offices range from Dallas to New York, and across the pacific in Seoul, and Singapore) they still manage to be one of the largest bank asset management firms in the world. On top of that Highland Capital Management has their hand in everything ranging from healthcare, oil and energy, bankruptcy and restructuring, real estate, and more.
Last year the Highland Small Cap Equity mutual fund delivered returns almost three times the S&P 500 for 2016. The fund was managed by Michael Steven, alongside Highland Capital’s president and co-founder James Dondero. Steven explained that the fund’s major success was due to strategic energy stock picks. The secret to their success was strategic partnerships with pipelines helped them take advantage when the price of a barrel of oil fell below $50. Steven also explained that none of the companies slashed or reduced their dividend rate once Highland purchased the shares. The small cap fund that Steven manages is only about $55 million, but it is still able to generate serious profit when used appropriately. With the New Year Highland reported divesting about two thirds of their energy assets to further diversify their interests in the coming year.
In fact, the only losses in Highland’s portfolio last year came from the healthcare sector. This is likely due to the current confusion and direction of the healthcare industry in recent years, but that doesn’t scare Steven or Dondero of Highland. Steven reported that insurance companies are finally coming around to properly addressing the “opioid epidemic” sweeping the US. This means the insurance companies are fast tracking drugs and products that can instantly and safely block the brain’s opioid receptors. This means lifesaving like Narcan that can save someone from an overdose can be as easily administered as your average nasal spray.
At the end of the day, these gains from all sectors are re-invested into local communities through Highland’s various charity arms. Maybe everything really is bigger in Texas.