Highland Capital has invested in funds that have almost tripled the returns of S&P 500 Index as compared to last year. Now they are projecting that health-care sector will be staging a tremendous comeback in 2017.
The chief investment officer of Highland Alternative Investors is Gregory. This firm is a unit of Highland Capital Management. It is based in Dallas. Presently it is managing about $15.4 billion. Gregory is overseeing the small-cap stock fund along with James Dondero, who is the president as well as co-founder of Highland Capital Management. This is a small fund as it has only $55 million in assets.
Gregory gives all the credit to “credit competency” of Highland Capital. This helped them to make highly lucrative investments that were in pipeline partnerships. This was done in early 2016 at the time when the oil prices were at their lowest. In fact, it is these investments that have contributed nearly half of the total return of the fund last year.
In fact, none of these selected partnerships cut any dividends after the fund had purchased their shares. Rather, it was the master limited partnerships that provided the high-single-digit or the low-double-digit dividends. Hence the cash flow gets predicated based on volume and not the price of crude.
Gregory and Dondero focused on MLPs that had solid “sponsors.” These were the main pipeline customers for the producers of oil.
Gregory is happy with this harvesting of gains and capturing profit. This is helped them to size down to an appropriate position.
He also noticed that the only sector of the S&P 1500 Composite Index which posted some decline last year was the health care sector. It showed a return that was of minus 2.1%. But he is expecting a tremendous rebound in 2017 for health care.
He spoke of epidemics in public health. He specifically referred to the opioid addiction taking place in the U.S. He also spoke about insurance companies getting into it. The approval process for getting pain relievers that are low in addiction is getting fast-tracked. Hence companies having a new approach towards pain relief will be getting this advantage.