Investment advisory firm B. Riley Capital Management, a subsidiary of Woodland Hills-based B. Riley Financial, has set up a new credit division called Gateway Credit Partners.

Gateway Credit Partners provides management services for fixed-income investments. The division will focus on acquiring undervalued securities in the corporate credit market and will specialize in issuing collateralized debt obligations.

B. Riley has selected Tim Gramatovich for the post of chief investment officer at Gateway. Gramatovich has more than 30 years of experience in the leveraged finance business, most recently as co-founder and chief investment officer of Peritus Asset Management.

“Tim’s extensive experience, combined with his unique approach to investing in the high-yield bond and leveraged loan markets, make him a valuable addition to our new platform,” Bryant Riley, co-chief executive of B. Riley Financial, said in a statement.

Gramatovich will be responsible for establishing Gateway Credit Partners’ presence in actively managed credit portfolios.

Shares of B. Riley (RILY) closed Tuesday up 12 cents, or less than 1 percent, to $17 on the Nasdaq.