Highland Capital Management is preparing for the initial public offering of Highland Financial Trust, with the offering potentially appearing in the next two quarters. A Highland official declined comment. The S1 for the IPO was filed with the Securities and Exchange Commission Oct. 31.
The fund is structured as a master limited partnership focused on investing in structured products, specifically the equity in collateralized debt obligations, inclusive of things in the real estate space. It will invest in four CDO sectors: collateralized loan obligations, asset-backed securities, commercial real estate and trust preferred securities, according to the filing.
The fund is expected to be over $400 million. Highland did its first round of fundraising last February and raised about $241 million, according to the S1. In October, it completed another private placement, which generated about $162.5 million, the filing says. Citigroup, JPMorgan, Goldman Sachs and Credit Suisse acted as the placement agent for the February placement and Citigroup and JPMorgan acted as the placement agent for the second placement. Those two firms will act as joint lead bookrunner and joint lead underwriter in connection with the offering, according to the filing.
Highland manages over $15.5 billion in CDO assets, as of Sept. 1. It and its affiliates manage 19 CDOs, 16 of which Highland sponsor.