SCHEDULE: Dondero Group Boosts Stake in Highland Opportunities & Income Fund

James D. Dondero and affiliated entities have significantly increased their beneficial ownership in Highland Opportunities & Income Fund through recent open market purchases.

Summary

• James D. Dondero and affiliated entities (Highland Global Allocation Fund, Drugcrafters, NexPoint Asset Management, and Nancy Marie Dondero) have filed an Amendment No. 2 to their Schedule 13D for Highland Opportunities & Income Fund.
• Since the last report, Highland Global Allocation Fund (GAF) purchased an additional 636,327 Common Shares in open market transactions.
• The aggregate purchase price for these shares was $4,055,613, acquired at prices ranging from $6.11 to $6.51 per share.
• As of December 10, 2025, James D. Dondero beneficially owns 4,144,711.77 Common Shares, representing approximately 7.5% of the outstanding shares.
• Other reporting persons' beneficial ownership includes Drugcrafters with 72,082 shares (0.1%), GAF with 2,064,005 shares (3.7%), NexPoint Asset Management with 2,064,005 shares (3.7%), and Nancy Marie Dondero (as trustee) with 2,006,881.1 shares (3.6%).
• A trust for which Nancy Marie Dondero serves as trustee also received 9,353.18 Common Shares through the Issuer's dividend reinvestment program.

Sentiment

Score: 8

Explanation: The consistent and substantial open market purchases by James D. Dondero and affiliated entities, increasing their beneficial ownership to 7.5%, signals strong insider confidence and a positive outlook on the company's value and future prospects.

Positives

• Significant open market purchases by key insiders and affiliated entities, totaling 636,327 Common Shares, indicate strong confidence in the Issuer's future prospects.
• The consistent buying activity across multiple dates suggests a deliberate strategy to increase exposure to the company.
• James D. Dondero's aggregate beneficial ownership of 7.5% of outstanding shares demonstrates a substantial and influential stake.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance from the Issuer, but the increased stake by reporting persons may signal their positive outlook on the company's future.

Management Comments

• James D. Dondero disclaims beneficial ownership of such shares [held by NexPoint, Drugcrafters, and GAF] except to the extent of his pecuniary interest therein.
• Nancy Marie Dondero is the sister of Mr. Dondero and disclaims beneficial ownership of such shares [held by the trust for which she serves as trustee].

Industry Context

This filing indicates a significant and increasing insider stake in Highland Opportunities & Income Fund, a closed-end fund. Such accumulation by a prominent investor group like the Dondero entities and NexPoint Asset Management often suggests a belief in the fund's underlying asset value or potential for strategic changes, which can be a notable event within the investment fund industry.

Related Party Transactions

• James D. Dondero is the sole stockholder and director of NexPoint's general partner, and NexPoint manages GAF.
• James D. Dondero owns 75% of PCMG Trading Partners XXIII, L.P., which owns 99% of Drugcrafters, L.P.
• Nancy Marie Dondero, sister of James D. Dondero, serves as trustee for a trust that beneficially owns shares and participates in a dividend reinvestment program.

Stakeholder Impact

• Shareholders: The increased insider ownership may be viewed positively, signaling confidence from a major investor group, potentially leading to increased investor interest and share price stability or appreciation.
• Management: The significant stake held by James D. Dondero and his affiliates could lead to increased engagement or influence on corporate strategy and governance.

Next Steps

• The reporting persons will continue to monitor their investment in Highland Opportunities & Income Fund.
• Further amendments to the Schedule 13D would be filed if there are material changes to their ownership or investment intent.

Key Dates

Recommendation

The consistent and substantial open market purchases by James D. Dondero and his affiliated entities, increasing their beneficial ownership to 7.5%, represents a strong vote of confidence from a sophisticated insider. This aggressive accumulation, particularly at varying price points, suggests a belief in the intrinsic value and future potential of Highland Opportunities & Income Fund, making it a compelling 'strong buy' signal for investors.

Keywords

Highland Opportunities & Income Fund, James D. Dondero, Schedule 13D, Insider Buying, Beneficial Ownership, NexPoint Asset Management, GAF, Common Shares, Investment Fund, SEC Filing