After forming Washington DC-based Cicero Capital Partners, an alternative asset manager, their flagship CCP Total Return Fund I will launch with approximately $10m next month.

The fund is a long/short equity fund, which will invest primarily in publicly traded equities with an emphasis on the financial services sector.

Grunewald, a founding partner, said he and his colleagues formed Cicero Capital Partners to take advantage of what they consider to be a uniquely attractive investment environment.

“While the current market volatility and rapidly changing investment landscape creates risks, it has also created an unprecedented investment opportunity,” he said. “This is particularly true within the financial sector. We believe that our deep industry knowledge and contacts will allow us to take advantage of this opportunity.”

At American Capital, Grunewald was head of the financial services group, focusing on private equity and structured debt investments. Previously, he was head of specialty finance investment banking at Wachovia Securities.

Meanwhile, Houck was portfolio manager of American Capital’s Total Return Fund. Previously, he was a managing director and senior research analyst at Wachovia and AG Edwards. Small was vice president of American Capital. Prior to that, he was an investment banker at JMP Securities.

The fund has an initial capacity of $200m, will have a $500,000 investment minimum and a one-year lockup. Jefferies & Co. is the prime broker.