Sundaram Alternates Successfully Exits Second Real Estate Fund with 17% IRR
Sundaram Alternates, the alternative investment arm of Sundaram Finance Group, has successfully exited its second real estate credit fund, delivering a gross investor IRR of 17%. The fund invested in fully secured, high-yielding debentures issued by Indian real estate developers in key South Indian micro markets.
Real EstatePrivate CreditInvestmentSundaram AlternatesIrrReal EstateOct 06, 2025
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 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 delivered a zero capital losses track record even through challenging market cycles between 2019 and 2023, including the COVID period.
Sundaram Alternates has recorded 38 complete exits and over 10 partial exits aggregating to over Rs 2,600 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.
“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,” says Karthik Athreya, Director at Sundaram Alternates.
Sundaram Alternates’ cumulative capital raise for real estate now exceeds ₹2,600 crores across four dedicated funds. To date, it 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.
Frequently Asked Questions
What is the IRR achieved by Sundaram Alternates' second real estate credit fund?
Sundaram Alternates' second real estate credit fund, SA RE Credit Fund II, achieved a gross investor IRR of 17%.
What was the total investment in SA RE Credit Fund II?
The total investment in SA RE Credit Fund II was Rs 435 crores.
What strategy did SA RE Credit Fund II follow?
SA RE Credit Fund II followed a disciplined credit strategy with a diverse capital allocation, a risk-adjusted approach to underwriting, and focused on de-risked brownfield projects in key South Indian micro markets.
How many complete and partial exits has Sundaram Alternates recorded?
Sundaram Alternates has recorded 38 complete exits and over 10 partial exits aggregating to over Rs 2,600 crores over the past 8 years.
What is the current annual cash yield generated by the SA RE credit portfolio?
The SA RE credit portfolio currently generates an annual cash yield of 15-16% for its investors.
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