Highland Capital Management will now manage its own marketing and business development activities, ending its distribution agreement with Ambassador Funds Management.

In 2005, Highland signed up third-party marketer Ambassador to distribute and market its products in the Australian market.

"For the past four years, Highland leveraged Ambassador's expertise in Australia and New Zealand to penetrate the market for fundraising and client service functions. Ambassador has served as an important partner in client service," Ambassador partner Richard Darke said.

Since then the firm has secured a number of institutional clients, including Westscheme and Local Government Superannuation.

"Highland and Ambassador have now reached an important transitional milestone which facilitates Highland inserting its own personnel in Australia and New Zealand," Darke said.

As part of its expansion in the region, Highland plans to hire people in either Sydney or Melbourne.

"We really have been happy with our relationship with Ambassador and feel they have done a fine job in establishing our business in the market," Highland head of Asia-Pacific operations Paul Adkins said.

Adkins said the firm would establish either a Melbourne or Sydney office, however, at this stage Sydney was firming as the favourite.

The firm also plans to offer new products to the Australian market including opportunistic investment opportunities, bank loans and private equity strategies in timberland, oil and gas.

"We are finding that many of our institutional investors are looking to diversify their portfolios and we see opportunities from this," Adkins said.

Globally, Highland has $33 billion in funds under management and specialises in global alternative fixed income strategies.