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Sundaram Alternates raises Rs 1,000 crore for realty fund

FE Bureau

15 Jan 2025

The fund has attracted a diverse pool of investors across institutions, family offices, corporate treasuries and high net worth

Sundaram Alternates, part of Sundaram Finance, on Wednesday said it has made the first close of Rs 1,000 crore for its real estate fund.

High Yield Secured Real Estate Fund IV, has a total corpus of Rs 1,500 crore. It is 70% deployed in a portfolio that is yielding an internal rate of return of close to 19%. The fund  will primarily focus on the mid-market residential segment in South Indian micro markets. “Over the last seven years, Sundaram Alternates has designed its own proprietary senior-secured underwriting methodology that prioritises capital protection while delivering consistent quarterly returns to its investors,” it said. The fund manager said it has a track record of 60 deals and zero invested capital losses till date.

The fund has attracted a diverse pool of investors across institutions, family offices, corporate treasuries and high net worth individuals. “This commitment bears testimony to Sundaram Alternates’ relentless focus on capital preservation, quarterly cash yields and superior risk-adjusted returns from its private credit strategies,” it said. Karthik Athreya, director and head of strategy – private credit, Sundaram Alternates, said: “The progress to date of SA’s fourth real estate credit fund highlights our strong execution abilities even amid challenging market conditions. Our focus has always been on making secured investments that generate consistent returns while protecting our investors’ capital. Over the years, SA has deployed over ₹3,200 crore into senior credit at 18-20% asset-level return, which provides a strong buffer to deliver consistent mid-teen net returns to investors.

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