When Jim Dondero, the CEO of Dallas-based Highland Capital Management, invested in Argentina’s bonds in 2014, some people in the industry thought he had been sitting in the Dallas sun too long. Argentina was in a bitter battle with four other hedge funds because the President de Kirchner defaulted on the bonds, and she refused to pay the hedge funds more than a few cents on the dollar to satisfy the debt. But Dondero saw something that the other investors didn’t see. He realized that de Kirchner was on her way out as president, and Mauricio Mauri, the personable Harvard graduate, and civil engineer could defeat her in the 2015 election. Dondero’s investment in Argentina paid off. The bonds returned about 25 percent the first year. Mauri did defeat de Kirchner, and he resolved the debt issue with the four hedge funds. Mauri also offered more bonds on the international bond market in 2016, and Highland Capital Management was one of the first firms in line to buy more Argentinean bonds.
It seems James Dondero is making another bold move by taking a more than 11 percent stake in Pendrell Corporation. Pendrell Corporation is located in Kirkland, Washington. The firm has active IP licensing programs, and those programs represent 1,200 patents in smartphones, tablets, and other electronic devices. Pendrell does a great deal of research and development on new products, and the company files for new patents on a regular basis. Pendrell also buys and develops businesses with unique technologies. Those businesses are usually protected by intellectual property (IP) rights. Those rights give Pendrell the opportunity to offer products and services to the global market.
Highland Capital Management recently purchased more than 13 million shares of Pendrell, and James Dondero purchased 23 million shares. That gives Highland Capital Management and Jim Dondero a 6.5% and an 11 percent stake in Pendrell. It’s not unusual for Highland Capital Management to buy into a company that is not on the radar of other investment firms. Highland Capital Management has more than $16 billion in assets under management. Dondero likes to invest in emerging markets like Argentina, Brazil, and South Africa. Dondero’s Highland Capital hedge fund is one of the most successful funds in the investment industry.