Sundaram Alternates Raises ₹1,000 Crores for Real Estate Credit Fund IV
Sundaram Alternates (SA), a USD 850 million alternate asset manager and part of the Sundaram Finance Group, has raised INR 1,000 crores in capital commitments for its Sundaram Alternative Opportunities Series – High Yield Secured Real Estate Fund IV. This marks the success of the fourth fund in its flagship real estate credit strategy, which has consistently demonstrated strong performance through a track record of approximately 60 deals without any invested capital losses.
The SA RE Credit Fund IV primarily focuses on secured debt financing for real estate developers in key South Indian micro-markets. These developers are known for their proven track records of timely deliveries, especially in the mid-market residential segment. The fund leverages SA’s proprietary senior-secured underwriting methodology, designed to prioritize capital protection while offering quarterly returns. As of now, 70% of the fund has been deployed in a portfolio yielding nearly 19% internal rates of return (IRRs).
This emphasis on senior-secured credit structures underscores SA’s commitment to creating a balance between attractive returns and capital preservation. The fund’s focus on mid-market residential developments aligns with the growing demand in this segment, providing a critical source of financing for projects with strong execution potential.
Over the last seven years, Sundaram Alternates has deployed more than ₹3,200 crores into senior-secured credit opportunities, delivering consistent returns in the range of 18–20% at the asset level. Despite market disruptions, such as the 2018 NBFC crisis and the challenges brought on by the COVID-19 pandemic, Sundaram Alternates has maintained consistent performance, earning the trust of its investors.
The fund has attracted a wide pool of investors, including institutions, family offices, corporate treasuries, and high-net-worth individuals (HNIs). This reflects the increasing recognition of real estate as an attractive asset class, supported by Sundaram Alternates’ solid track record and its ability to manage risk while delivering consistent returns.
Speaking about the fund’s progress, Mr. Karthik Athreya, Director & Head of Strategy – Private Credit at Sundaram Alternates, highlighted the firm’s strategic approach to investing in secured credit. He said, "The progress to date of SA’s fourth real estate credit fund highlights our strong execution abilities even amidst 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 crores into senior credit at 18-20% asset level returns, which provides a strong buffer to deliver consistent mid-teen net returns to investors. I’m proud to say that a majority of our LPs are repeat investors who have appreciated Sundaram’s risk-mitigated and cautious approach to underwriting and prioritisation on capital safety and risk management. SA’s goal in the private credit business is to create diverse secured credit portfolios that are resilient in the face of macro and micro headwinds while being able to tap into interesting risk-reward opportunities that deliver attractive returns."
The Sundaram Finance Group, the parent company of Sundaram Alternates, brings more than 70 years of experience and credibility to its financial services offerings. As a AAA-rated deposit-taking non-banking financial company (NBFC), Sundaram Finance has established a reputation for delivering consistent returns. This legacy of trust enhances investor confidence in Sundaram Alternates’ private credit strategies.
Backed by a proven methodology and Sundaram Finance, Sundaram Alternates is focused on building strong, secured credit portfolios. By targeting opportunities in South Indian real estate markets, the SA RE Credit Fund IV aims to provide long-term value to its investors and strengthen its role as a trusted partner in real estate credit investments.
