Business Leader, Investment Management, Philanthropy

Meet the Founder Of NexPoint: James Dondero

James Dondero and David McFadzean describe in detail how they came up with the NexPoint Strategy. After seeing plenty of successful REITs in the years after the financial crisis, they realized that a broader array of investment vehicles could allow people to invest in the real estate sector without the difficulties of being a small investor. So one of the first products they launched was a closed-end fund in 2012, with several more to follow.

James Dondero is noted by industry observers to be a pioneer in several realms, especially in developing innovative approaches in the “Collateralized Loan Obligation (CLO)” market.

NexPoint is currently investing approximately $1 billion of its assets under management in real estate debt strategies. Using opportunistic strategy and due diligence by institutional investment professionals, they can identify solid and well-run assets with superior long-term potential and avoid many of the riskier and more speculative investments found in the broader REIT marketplace.

NexPoint is currently investing approximately $1 billion of its assets under management in real estate debt strategies. By using opportunistic strategy and due diligence by institutional investment professionals, they can identify strong, well-run assets with superior long-term potential and avoid many of the riskier and more speculative investments.

NexPoint has differentiated itself by believing that as people get older, their real estate needs change. “We take clients as they come and give them options as they get older,” says Dondero. Its strategy is based on the needs of retirees who are now looking for housing and have some liquid assets to invest in. “We look at properties that are a little bit affordable, senior housing and communities for seniors,” says Dondero.

James Dondero says that as the senior population gets older, their buying power is going down. “People who have been able to draw income for decades, and get out of their lives without paying a dime of income tax, those folks are now transitioning to the next phase of their lives where they are going to need to pay income taxes, and they’re trying to do that with their savings.

Investing in real estate is not as simple as it may appear. What really determines how a REIT does — at least, over a long-term horizon — is how well it earns money. And to do so, a REIT must invest and generate income through rents and property sales. Refer to this page to learn more.

 

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