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Investment banks are financial arbiters who provide an array of services to clients, such as: acting as stock/security brokers; assuming role of middleman between security issuers and investors; overseeing mergers between large corporations and enterprises. JP Morgan, Deutsche Bank, and Goldman Sachs are examples of popular, international investment banks.
Albeit smaller than the aforementioned investment banks, Highland Capital Management is an investment advising firm who controls more than $21 billion worth of assets. Highland Capital’s operations are based out of Dallas, Texas, and maintains business offices in Sao Paulo, Seoul, Singapore, and New York City. Highland Capital Management was co-founded by Mark Okada and James Dondero in 1990, as a joint venture with Protective Life Insurance Corporation.
James Dondero is currently President of Highland Capital Management. Mr. James Dondero is associated with a few other companies, aside from Highland: he is Chairman of Cornerstone Healthcare, Nexbank, and CCS Medical; member of the board of American Banknote and MGM Studios; and frequently donates to public policy, education, and veteran’s affairs causes.
James Dondero started his career by earning a bachelor’s degree in Accounting and Finance from the University of Virginia. After graduation, Mr. Dondero became certified as a Certified Management Accountant and Chartered Financial AnalystJames then accepted an opportunity from Morgan Guaranty as a business analyst, a training program designed for young businesspeople. In 1985, James Dondero started working at American Express; first, as a Corporate Bond Analyst, then was promoted to Portfolio Manager a few years later. Mr. Dondero was then promoted to Chief Investment Officer until he stepped down in 1993 to pursue building Highland Capital Management. Today, Mr. Dondero is a considerably successful businessman, with more than thirty years of experience in equity markets.
Back to investment banking — although investment banks play many roles and have several responsibilities, their main functions are advising big businesses and governments about reaching their financial goals, and aiding them in obtaining financing. For example, ABC Corporation, a multi-million dollar, international business, would contact Highland Capital Management if executives sought more reliable financing.
Another keystone function of investment banks is underwriting bonds and stocks. Underwriting can be difficult to understand, but is essentially when investment banks pair with corporations, and those investment banks represent the corporations in the initial public offering of their bonds, securities, or stocks. Investors then purchase securities, stocks, and bonds from investment banks, rather than directly from the corporation.
Investment banks also manage assets, wealth, and conduct independent research. Investment banks do not publish academic works (investment banks sometimes sell their research, though), but perform external research on various markets, so they can make better decisions on purchasing or selling stock. In managing assets and wealth, investment banks recommend different stocks, bonds, and markets to invest in, so owners of assets and wealth will maintain that wealth and those assets, and hopefully end up earning more.