Highland Capital Management has long been one of the more interesting investment firms working the market. The company was established by CEO James Dondero and in 1993 and it has since grown to become one of the largest, most innovative credit managers on the planet. Their work diversifying for clients and taking risks, the right risks, has paid huge dividends. Now, we’ll look at where Highland Capital Management is focusing as another year rounds the corner: the health care sector.
Highland’s Small Cap Equity Fund saw a nearly tripled rate of return last year behind the picks of one Michael Gregory. Gregory utilized his knowledge to pick out important energy companies that he felt would pay huge dividends in the future and boy was he right. Now, Gregory and the rest of the team at Highland Small Cap Equity Fund are transitioning to the healthcare sector. There is a lot of buzz rolling around the healthcare industry thanks to the new Presidential administration in the United States, and Gregory thinks that there is something to like about that.
Gregory pointed to the tragic opiate epidemic that is sweeping through the United States as an indicator that there is room for growth in the healthcare field. Gregory points to this epidemic and highlights it by saying, “The insurance companies are starting to do something about it.” What does he mean by this? Well, insurance companies are working with the healthcare field in order to get healthier, less addictive alternative pain relievers down and into the market. A prime example comes from Collegium Pharmaceutical Inc (COLL) which has worked to develop XTAMPZA ER. XTAMPZA ER is an oxycodone based medication that helps relieve pain while cutting down on the chances for patients to become addicted to the drug. You can see why this would be huge for the healthcare field.
Outside of healthcare Gregory also points to the real estate market as another area where savvy investors might be pushing their money. Gregory is a fan of several real estate investment trusts including NXRT, IRT, and JCAP. He believes that the market is primed for explosive growth through 2017.