Jim Dondero, the charismatic CEO of the Dallas-based investment firm Highland Capital Management is as cautious with the firm’s charitable giving budget as he is with their hedge fund partner’s investment money. That’s why Dondero teamed up with Mary Jalonick at the Dallas Foundation. The Dallas Foundation raises money for civic organizations in Dallas that need help and Highland Capital has an annual philanthropic budget of more than $3 million. In fact, the Highland Capital budget is big enough that Dondero was instrumental in the hiring of Linda Owen. Linda Owen is the former Woodall Rodgers Park Foundation CEO. Owen is familiar with Dondero’s interests and she knows the Dallas Foundation has many of the same charitable interests. Having a major hedge fund manager as a charitable giving partner will help the Dallas Foundation immensely, according to Jalonick. Dondero said he was excited about the new agreement and the addition of Linda Owen.
Hedge fund investors and managers are an elite group. Hedge funds are only available to accredited investors, so they are not offered to the average investor. For years, hedge funds avoided direct regulatory supervision, so they operated with greater flexibility than mutual funds and other investment vehicles. But when the Great Recession hit Wall Street in 2007-08, the United States, and Europe decided to pass legislation that eliminated regulatory gaps.
Some hedge fund managers have fallen into a passive state where they rely on overall market gains instead of using their investment skills to produce decent returns. Alpha management is the term James Dondero uses to describe producing extra returns from acute investment skills. Dondero and Okada spoke at the Alpha Hedge West conference in San Francisco recently, and he said the value of investing in alternative credit funds has been a winning strategy for Highland Capital Management. The Highland Global Allocation fund is a $947 million fund that is a hybrid between a hedge and mutual fund, and it is up more than 20 percent in 2016, according to Jim Dondero. That’s why Dondero decided to team up with the Dallas Foundation. More charitable money may be available in 2016, and Linda Owen will use it wisely.