Signal Capital Partners, the London-based fund manager, has raised around €700 million for the second close of its Signal Alpha II asset-backed special situations fund, according to market sources.
The fund, which held its first closing in Q3 2019, has a target of €850 million with a hard-cap of €1 billion. It is understood that the firm is aiming for a final close around the end of the third quarter. The firm declined to comment.
The fund focuses on asset-backed corporate credit and commercial real estate special situations lending and restructuring, seeking deals at or below €75 million. The fund targets high-teen returns and does not use fund level leverage. Unlike many other special situations and distressed players in Europe, Signal has a focus on the core European economies.
Investors include the likes of HSBC, a German pension fund, European family offices, Israeli insurers and US endowments. Many of the second fund’s investors have re-upped from the first fund, which closed on €720 million in October 2017.
The team has five partners comprising former Deutsche Bank executives Elad Shraga (chief investment officer), Amit Jain (head of credit investments) and Gad Caspy (head of real estate investments), alongside Fredrik Metze (ex-head of European distressed investments at Fortress) and Colman McCarthy (ex-head of NPL investments at Kennedy Wilson).
Signal recently hired Nick Waring, former head of asset-backed securities (ABS) trading at Deutsche Bank, who joined last month to focus on distressed ABS investments. It is understood that Signal expects to see interesting opportunities arising from dislocations in the ABS market, possibly leading to restructuring opportunities backed by hard asset values.
Other recent hires have included David Scheurl, who joined in January this year from Metric Capital to focus on private origination of bilateral stressed and distressed opportunities; and Lorenz Kroeber, formerly of Blue Mountain and Goldman Sachs, who also joined last month to focus on distressed restructuring investments.
The hires are designed to help bolster Signal’s senior sourcing capabilities across the region. The firm uses what it claims is proprietary AI-based origination technology.