Highland Alternative Investors, a subsidiary of the huge Highland Capital Management company recently revealed that it is shifting its focus away from traditional SP 500s and towards alternative investments in the health and other emerging sectors after its investments last year showed they made more than a triple of what they made from S & P 500 through investment in similar alternatives. The company which is based out of Dallas made a return of 31.6% in the year 2016 from its Class A shares compared to a much smaller return of 12% made on its large cap S & P shares.
Even though Highland Capital Management oversees the management of more than 15 Billion dollars in assets, its subsidiary Highland Alternative Investment has a much smaller fund that is made up of just about $55 million in assets. Which makes the results even more impressive. The latter is managed by Michael Gregory together with James Dondero. Mr. James Dondero is one of the co-founders of Highland Capital Management and currently serves as the president of the company.
While explaining why the company had enjoyed what he called a great year in 2016, Michael Gregory pointed out that the company has a high credit competency and this is why even though the prices of oil continued to fall throughout the year they were still able to enjoy lucrative partnerships and deals with pipelines. Even more interesting was his response when asked to give his six best stock picks for the year 2017.
Considering the fact that health care was the only sector within the S&P 1500 Index that posted a decline in 2016, it would seem odd that this was the first sector that the guys from Highland Capital Investment would mention as their stock pick. But they predict that the sector is set for a rebound this year as a result of the addiction to opioids in the States. The fact that insurance companies are now taking notice and accelerating the approval process for new pain relieving drugs that are less addictive could lead to increased production and faster growth within the industry.