Sundaram Arm Plans to Raise up to INR 1500 Cr for its Real Estate Fund

Sundaram Alternates Assets, a subsidiary of the Sundaram Group, intends to raise up to 1,500 crore through its fourth real estate private credit fund, the Private Credit High Yield Real Estate Fund IV (RE Credit Fund IV), which will focus on growth and special situation opportunities.

In accord with its previous three real estate credit funds, the high yield credit investment fund will offer investors access to a diversified portfolio of secured real estate investments, with an emphasis on self-liquidating residential projects. The fund's total fundraising objective includes a green-shoe option of INR 750 Cr.

Sundaram Alternate Assets has deployed over 2,000 crores across its three funds over the last six years at an average total portfolio return of 18-20% and has been supported by repeat investors since 2017.

"This fund allows us to leverage our expertise and market insights to identify compelling investment opportunities in the real estate sector: By focusing on a range of opportunities within the sector, we aim to provide investors with a well- rounded and diversified portfolio,"

said Vikaas M. Sachdeva, Managing Director at Sundaram Alternates.

Additionally, the fund will support last-mile financing, project acquisitions, and select rescue financing with superior returns and capital protection. "The introduction of our fourth real estate credit fund is a testament to our track record in this sector despite materially deleterious credit events and tumultuous markets over the past five to six years.

Sundaram Alternates' Director & Head of Strategy, Alternative Credit, Karthik Athreya, said, "We see no reason to reinvent the wheel, and our key underwriting philosophy will continue to centre on protecting our investors' capital through stringent credit metrics and prudent risk management strategies."

According to Athreya, investments from the previous three funds have assured robust loan-to-value ratios, priority cash flows, and differentiated multi-layered security structures that encourage prompt repayments.