Sundaram Alternates' ESG-Aligned Real Estate Credit Fund V Surpasses ₹1,000 Crore in Commitments
Sundaram Alternates (SA), the alternative investment platform of the Sundaram Finance Group, has achieved a significant milestone by crossing ₹1,000 crore in capital commitments for its SA Real Estate Credit Fund V within just three months of its launch. This fund, introduced in October 2025, stands out as India’s first ESG-aligned real estate credit fund and marks the fifth offering in the firm’s well-established real estate-backed private credit series.
The fundraising remains open and is expected to close by March 2026, with a target final corpus in the range of ₹1,500–2,000 crore. The rapid achievement of the ₹1,000 crore milestone underscores sustained investor confidence in SA’s Category II AIF platform and its disciplined approach to performing real estate credit.
Fund V has garnered commitments from a diverse mix of institutional and private investors, including insurance companies, family offices, corporate treasuries, and ultra-high-net-worth individuals. The fund also includes a sponsor commitment from the Sundaram Finance Group, reinforcing the alignment of interests between the manager and investors.
According to Sundaram Alternates’ management, the strong fundraising momentum reflects the firm’s long-standing focus on underwriting discipline, conservative risk frameworks, and capital protection. Over nearly a decade, the platform has developed a robust structured credit assessment and monitoring system designed to navigate multiple market cycles while safeguarding investor capital.
The investment strategy for Fund V centers on senior secured, amortising loans to brownfield residential projects that are already generating cash flows. By targeting completed or near-completion assets, the fund aims to minimize execution risk while maintaining predictable repayment profiles. Conservative loan-to-value ratios and strong collateral coverage are the cornerstones of the fund’s downside protection approach.
Environmental, social, and governance (ESG) criteria have been directly integrated into the fund’s underwriting and ongoing portfolio management process. Rather than being a mere overlay, ESG factors enhance overall portfolio resilience and credit quality by focusing on key aspects of asset allocation, governance, and risk management.
Since its inception in 2017, Sundaram Alternates has managed to raise over ₹3,800 crore across five real estate credit funds. The platform has consistently achieved internal rates of return (IRR) between 18% and 19%, with a remarkable track record of zero capital loss. Even during challenging periods such as the NBFC liquidity crisis, RERA, GST, the COVID-19 pandemic, and inflationary trends, the firm has ensured full repayment to investors.
The success of Fund V comes at a time when investor appetite for ESG-integrated private credit strategies is on the rise. With traditional funding channels becoming more selective, private credit has emerged as a crucial financing solution for India’s real estate sector. The sector is projected to reach a size of US$1 trillion by 2030 and contribute nearly 13% to India’s GDP, driven by robust office leasing activity and increased foreign direct investment inflows.
Karthik Athreya, the Managing Director at Sundaram Alternates, commented on the achievement, stating, “The fact that the funds have reached the ₹1,000 crore mark in just three months is a testament to the confidence investors have in our underwriting acumen and risk management framework. The hard work put into developing a comprehensive credit risk management framework over the last nine years has clearly started paying off.” As the funds move closer to the final close, the emphasis remains on prudent allocation and protection of capital.
With Fund V, Sundaram Alternates continues to position itself as a long-term player in India’s real estate credit market, combining capital protection, ESG integration, and consistent execution across market cycles.
