Alcentra BDC replaces CEO, hires two US direct lending heads

The firm feels, according to a source familiar with the matter, that it currently has the 'best team in place' to refocus the US mid-market lending arm’s strategy and improve performance.

Alcentra Capital Corporation’s (ABDC) chief executive, David Scopelliti, has stepped down as chief executive of the New York-based business development company, which has appointed global co-chief investment officer Vijay Rajguru to fill the vacant position.

Scopelliti handed in his resignation Tuesday of last week, effective Friday, according to a Securities and Exchange Commission filing. The departure was not the result of any disagreement, the regulatory disclosure read.

In addition, board member Steven Reiff, president and chief executive of Pittsburgh, Pennsylvania-based family office Beechwood Company, submitted his intention to leave the board, which was effective Monday. With the departure of the Reiff and Scopelliti, who was also a board member, the board has decreased from five members to three.

ABDC declined to comment on departures of Reiff or Scopelliti, the latter of whom also declined to comment.

In addition, ABDC has brought on Peter Glaser and Suhail Shaikh as managing directors as co-heads of US direct lending.

Glaser joins from KKR, where he headed the firm’s sponsor finance business, working with clients through the firm’s private credit and capital markets platform. For his part, Shaikh was formerly at Solar Capital Partners, which advises two public BDCs, where he worked as a senior investment professional.

Both men will bring a “renewed focus” to ABDC, which is Alcentra’s US direct lending arm, and will work to replicate the success the firm has had with the strategy in Europe, where Alcentra has raised billions of euros for multiple direct lending private funds.

The people moves come as ABDC is working to turn around its portfolio following what Scopelliti called a “challenging 2017” on the firm’s 2017 year-end earnings call in March. A source familiar with the situation said that the departure and hires have resulted in Alcentra having the “best team in place” to implement its vision going forward.

On its fourth-quarter earnings call, the firm said it would be focused on stabilising the portfolio, expanding its investment strategy and planning so-called performance improvement measures for this year.

ABDC planned to reduce its non-accruals and redeploy that capital into “less volatile, interesting-generating, floating-rate loans”, Scopelliti said on the call. In addition, its investment focus is moving to senior debt rather than on junior debt. It also plans to invest in larger companies while still selectively investing in smaller companies backed by a private equity firm.

Alcentra – which has offices in Boston, Hong Kong, London, New York and Singapore – is the alternative credit arm of the Bank of New York Mellon and manages $37 billion. Among other strategies, the firm invests in senior and mezzanine loans, structured credit, special situations and secured loans.

Editor’s note: The story has been updated to reflect Peter Glaser was previously at KKR, while Suhail Shaikh is formerly of Solar Capital. An earlier version misstated the mens’ biographies.