After getting burned in the credit crisis, Highland Capital Management is optimistic again about high-yield debt.
“Macro volatility will continue,” said Mark Okada, chief investment officer of Highland Capital. “That will create opportunities for people with a grasp of the fundamentals.”
Like many money managers, Highland got roiled by the problems in the debt market. In 2008, the firm shut down two of its largest hedge funds, including its flagship Crusader fund. Since then, Highland has watched its assets inder management fall to $22 billion from $40 billion two years ago.
Mr. Okada and his team have not allowed past performance influence their future decisions.
He predicted that volatility would be “a permanent feature of global deleveraging,” adding that 2011 “will be good to those who can handicap the micro.”
Money managers looking to expand have been heading to the debt markets. The Carlyle Group recently announced plans to buy Claren Road Asset Management, a credit-focused money manager. Credit has been a focus of Highland for years, with about $18 billion dedicated to the segment….
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