The LevFin Lens – EMEA Insight: Q&A with SIGNAL’s Elad Shraga

Investment firm SIGNAL focuses on opportunistic credit and special situations across private and public markets in Europe. Co-founder and CIO Elad Shraga spoke to LFI about the degradation of underwriting standards in the private credit space, default rates, and why he is more positive on AI challenging software business models than the rest of the market.

LFI: Given the crises the global economy has been facing, why haven’t we seen an increase in distressed and stressed debt financing over the last few years?

Shraga: Underwriting standards in direct lending have materially shifted over the past three to four years, reflecting a “natural” evolution as the market adapted to changing conditions. After the challenges of early 2022, the sector delivered a strong three-year run, which reduced investor focus on a potential distress cycle and led fund managers to stop actively seeking stressed and distressed opportunities – resulting in limited allocations to that segment…