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Flat Rock Global launches investment firm focused on yield-driven investment strategies

Wednesday, March 15, 2017
Opalesque Industry Update, for New Managers - Robert Grunewald and Richard Petrocelli have launched Flat Rock Global, a new alternative asset management firm focused on developing yield-driven investment strategies in sectors deemphasized by banks. The firm's initial fund, Flat Rock Capital, will be a Business Development Company (BDC) focused on investing in first lien, senior secured debt of middle market companies.

"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 Robert Grunewald, CEO and founder of Flat Rock. "Retail investors deserve the right to access this unique asset class in the same manner as institutional investors; with no load and no sales commission. Our single institutional-style share class means a dollar invested in Flat Rock Capital becomes a dollar invested in the fund."

Mr. Grunewald has over 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 CIO of Business Development Corp. of America (BDCA). Previously Mr. Grunewald headed the financial services investment banking group at Wells Fargo Securities (formerly Wachovia Securities) and later led the financial services investment practice at American Capital.

Richard Petrocelli, Flat Rock Global's Chief Operating Officer added, "I am excited to team with Robert given his tremendous track record as an operator and investor in the BDC industry. We have created an advisor structured with a lower fee focus that will live by its motto, Where Investors Come First."

Mr. Petrocelli has over 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, Mr. Petrocelli also served on the investment committee and was the firm's Chief Compliance Officer.

Flat Rock Capital will be offered through the registered investment advisor (RIA) channel with a no-load, institutional-style share class that is available to retail investors.

Business Development Companies are special investment vehicles designed to facilitate capital formation for small and middle-market companies. BDCs are closed-end investment companies and are exempt from many of the regulatory constraints imposed by the '40 Act. BDCs answer to an independent board of directors, and represent a transparent portfolio of investments.

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