New Alternative Asset Management House Takes Flight In US

Tom Burroughes

16 March 2017

An alternative asset management firm focused on investment strategies vacated by banks has been set up in the US under the name of Flat Rock Global.

The founders Robert Grunewald and Richard Petrocelli.

The firm’s initial fund, Flat Rock Capital, will be structured as a Business Development Company focused on investing in first lien, senior secured debt of middle market companies. Flat Rock Capital will be offered through the registered investment advisor channel with a no-load, institutional-style share class that is available to retail investors.

“We believe middle market debt provides investors with access to a unique asset class consisting of floating rate, senior secured investments that can generate higher yields, yet lower losses than high-yield debt or broadly syndicated loans,” said Grunewald, who holds the chief executive slot at Flat Rock, said.

Grunewald has more than 25 years of experience with middle market finance, BDCs and asset management. Within the finance industry, he has participated as a lender, investment banker, M&A advisor, private equity investor and hedge fund manager. He was most recently the former president and chief investment officer of Business Development Corp of America. Previously Grunewald headed the financial services investment banking group at Wells Fargo Securities and later led the financial services investment practice at American Capital.

Richard Petrocelli, Flat Rock Global’s chief operating officer, said: “We have created an advisor structured with a lower fee focus that will live by its motto, Where Investors Come First.”

Petrocelli has more than 20 years of experience with middle market finance, BDCs and private equity. Within the leveraged finance industry, he has underwritten and structured middle market loans as both a lender and a private equity investor. He has served as the chief financial officer of three business development companies: Saratoga Investment Corp, Fifth Street Finance Corp, and Fifth Street Senior Floating Rate Corp. At Saratoga, Petrocelli also served on the investment committee and was the firm’s chief compliance officer.