Sundaram Alternates (SA), the alternative investment arm of Sundaram Finance Group, announced the successful closure of its second real estate credit fund - Sundaram Alternative Opportunities Series – High Yield Secured RE Debt Fund II (SA RE Credit Fund II). The fund delivered a gross investor IRR of 17% post exiting its portfolio investments in its ~₹435 crores SA RE Credit Fund II.
SA RE Credit Fund II invested a 100% of its portfolio in fully secured, high-yielding debentures issued by Indian real estate developers. The fund’s strategy was focused on projects in key South Indian micro markets.
The fund pursued a highly disciplined credit strategy with a diverse capital allocation, a risk-adjusted approach to underwriting, de-risked brownfield projects backed by consistent sponsor commitments of over 15%, and delivering a zero capital losses track record even through challenging market cycles between 2019 and 2023, including the COVID period.
This successful exit marks another milestone for SA’s flagship real estate credit strategy. The platform has recorded 38 complete exits and over 10 partial exits aggregating to over ~INR 2600 crores over the past 8 years. In this period, the platform has built a strong track record of over 70 deals through 4 real estate credit funds across sector cycles, despite materially adverse economic events that include 2 COVID waves, the NBFC crisis, etc. SA’s underwriting resilience is further evidenced by the portfolio's cash generation. The SA RE credit portfolio currently generates an annual cash yield of ~15-16% for its investors and the funds have not missed a single quarter's income distribution since its inception.
Commenting on the development Mr. Karthik Athreya, Director at Sundaram Alternates, said, “The successful closure and exit of SA RE Credit Fund II underscores our commitment to delivering strong risk-adjusted returns while prioritizing capital protection. Our disciplined investment approach and unique underwriting methodology have enabled investors to achieve consistent, quarterly cash yields even during challenging market conditions. With increasing institutionalisation of private credit, interesting opportunities and a growing appetite for risk-adjusted returns from Indian investors, we believe this is a defining decade for private financing in India—and our goal is to position Sundaram Alternates as a dependable and trusted partner to investors as they allocate to these asset classes.”
SA has established itself as one of the most consistent players in the real estate credit space. The platform's cumulative capital raise for real estate now exceeds ₹2600 crores across four dedicated funds. To date, SA has deployed over ₹4,200 crores across 74 deals with contracted IRRs of 19%. Overall, the broader alternative investments platform at Sundaram manages more than ₹7000 crores in cumulative AUM across private credit, liquid fixed income and bespoke equity strategies.
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