December 9, 2022

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Business is my step

Highland Cash co-founder Mark Okada is ‘getting the band back again together’ to switch ‘chaos’ into financial gain

4 min read

Mark Okada is 58, but he estimates he’s got at least yet another 15 several years of battle in him.

“We Japanese are likely to live lengthy,” Okada joked.

Okada retired more than a 12 months ago from his situation atop 1 of the far more prolific — and at instances troubled — expenditure companies in the U.S., Dallas-headquartered Highland Capital Management.

But the outspoken, higher-profile financier could not sit on the sidelines for very long.

Before this month, Highland Capital’s previous main expense officer introduced his return. He’s established up a new investment agency identified as Sycamore Tree Money Associates that is specializing in choice credit score. Sycamore Tree is dependent in Dallas with an place of work in New York City.

And Okada will not be by yourself — he’s bringing a familiar forged of industry experts from preceding ventures alongside with him, experts in financial institution financial loans, higher generate bonds, structured credit rating and exclusive predicaments.

“I’m not creating this from scratch,” he reported. “I’m having the band back with each other.”

The firm’s founders consist of Okada in the position of CEO as very well as former Highland Funds companions Jack Yang and Trey Parker. Yang established Merrill Lynch’s financial loan syndication enterprise and Parker is a veteran of Morgan Stanley and BMO Merchant Banking.

Blended, the trio carries far more than 90 many years of encounter in non-public equity and expenditure banking.

Sycamore Tree Capital Partners CEO Mark Okada.
Sycamore Tree Money Associates CEO Mark Okada.(Leighton Okada Pictures)

“If you can include purchase to chaos, or you can build purchase out of complexity, you can typically increase very long-time period price to cash,” Okada explained. “And we’ve under no circumstances witnessed a lot more complexity or chaos, that is for certain.”

In retirement, Okada has continued to make appearances on company information network CNBC this yr to share his outlook on financial industry traits from the standpoint of an expenditure veteran who has weathered his reasonable share of downturns.

In Okada’s see, the recent financial crisis dealing with the U.S. is not a person born of the economical markets, but of science. He draws similarities amongst how the federal government flooded marketplaces with income and unprecedented fiscal procedures in response to the Excellent Economic downturn and how the U.S. is navigating the existing disaster amid the COVID-19 pandemic.

“If you are a veteran and you have noticed this movie so quite a few instances before, and you step in and form by the haves and the have-nots for winners or losers …, there really is the capability to insert sizeable value to portfolios,” Okada said.

Whilst the Federal Reserve is intent on maintaining curiosity costs in close proximity to zero via at minimum 2023, Okada sees an opportunity to generate larger yields.

“Really, personal credit and the markets that we target on are very, quite beautiful in that context,” he mentioned.

Corporations like Sycamore Tree offer traders a way to diversify portfolios with beautiful returns on investments in nontraditional assets, this means property that never fall underneath preset-incomes and stock buying and selling. In return, the companies make income from costs.

In 2012, Highland Cash emerged from the Good Recession as the second-most significant credit card debt-backed securities supervisor in the planet at the rear of only the Blackstone Team, a private equity investment decision big.

Highland, which managed $38 billion in assets at its peak, drew a standing for remaining aggressive and litigious in its expenditure techniques. It’s been inclined to trudge through yrs of legal battles with everyone from previous executives to upset buyers. It’s also claimed to have designed millionaires out of dozens of its personnel, per year.

Highland Money Administration LP, the firm’s entity experiencing a court docket judgment to pay out $189 million to disgruntled investors, has been in liquidation given that the fiscal crisis and submitted for bankruptcy a thirty day period following Okada’s departure. Cofounder Jim Dondero relinquished his position as president of the organization at the commence of 2020 as it proceeds through reorganization.

Okada declined to remark on his departure from the business he saved an ownership stake in right after retirement other than to say he still left on superior terms. He explained he has been in a position to spend time with his grandkids.

“I loved a 25-year profession, and which is something really unique,” Okada mentioned.

Blackstone Group, the world's largest private equity firm, announced it had made a "significant" minority investment in Dallas-based ISN Thursday through its Blackstone Growth arm.

For Okada, the chance to start out a little something new was “too substantially to pass up,” and he hopes to establish one thing that is pertinent.

Rounding out Sycamore Tree’s advisory board are power mogul Ken Hersh and Lucchese Boot Co. board chair John Muse, who are also investors in the firm’s original resources.

“We’ll try to be humble and honest about what we do know and never know, and understand from our faults,” Okada said.

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