Sundaram Alternates launches 750 Cr RE Pvt Credit Fund

Mumbai, June 29 Sundaram Alternates, a subsidiary of the Sundaram Group, today announced the launch of its latest high yield credit investment offering, the Sundaram Alternative Opportunities Series – High Yield Secured Real Estate Fund IV (RE Credit Fund IV). Similar to its earlier 3 real estate credit funds that delivered consistent returns to investors over the past 5 years, this fund is designed to provide investors with access to a diversified portfolio of secured real estate investments, with a primary focus on self-liquidating residential projects across key South Indian micro-markets, in addition to interesting opportunities such as last-mile financing, project acquisitions, select rescue financing etc at attractive returns while being secured from a capital protection perspective.

With the robust outlook for the real estate sector and its performance over the last 12 months, RE Credit Fund IV aims to create a largely growth-oriented portfolio and build key developer relationships within the real estate categories of mid-market residential, hybrid and commercial projects that offer attractive down-side protected returns. Approximately 70-75% of the fund’s allocation will be directed towards projects with visible cash flows post approvals thereby ensuring downside protection and regular income streams to investors. The remaining 25-30% will be tactical/ opportunistic investments that provide higher returns to boost portfolio performance.

“We would like to introduce our 4th fund in the real estate private credit space, open for subscriptions, to our esteemed investors” stated Mr. Vikaas M Sachdeva, MD at Sundaram Alternates. “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.”

Mr. Karthik Athreya, Director & Head of Strategy - Alternative Credit at Sundaram Alternates, added, “Our 4th real estate credit fund launch is a strong testament to our track record in this space amidst difficult credit events and volatile markets over the last 5-6 years. Our key underwriting philosophy will continue to centre around protecting our investors’ capital through stringent credit metrics and prudent risk management strategies. Hallmarks of our real estate credit policy have been strong LTVs, priority cash flows, amortising investments and our differentiated multi-layered security structures that incentivize timely repayments.”

RE Credit Fund IV seeks to raise Rs 750 Crores with a Green shoe options Rs 750 crores - So total target size is Rs 1500 The RE Credit Fund IV will focus on sub-INR 100 crores deals, which offers fund diversification as well as attractive risk- rewards. The Fund will target gross deal returns ranging between 18-22%* on a senior secured basis. With deal tenors typically ranging from 3-4 years, the fund offers an attractive investment horizon that seeks to capture the growth momentum in the sector and within this tenor, both principal and interest recoveries are structured on a quarterly basis as part of the fund’s credit risk management.

RE Credit Fund IV underscores Sundaram Alternates’ execution abilities in this asset class having profitably deployed over INR 2000 crores over the last 6 years and backed by the faith of its investors who have repeatedly invested in successive funds since 2017.