Sundaram Alternates Targets Rs 2,000 Crore Real Estate Fund by March
Sundaram Alternates, the alternative investment arm of the Sundaram Finance group, announced on Monday its plans to raise up to Rs 2,000 crore in a real estate fund by March this year. This ambitious target is part of the company's strategy to capitalize on the growing real estate market in India, while maintaining a strong focus on environmental, social, and governance (ESG) principles.
The company has already raised Rs 1,000 crore in the SA Real Estate Credit Fund V over the last three months. Now, Sundaram Alternates aims to raise an additional Rs 500-1,000 crore by March, as stated in an official press release. This new fund is designed to be the first ESG-aligned offering in the real estate sector, attracting commitments from a diverse range of investors, including insurance companies, family offices, corporate treasuries, and ultra-high-net-worth individuals, in addition to a significant sponsor commitment from the Sundaram Finance group.
Karthik Athreya, Managing Director of Sundaram Alternates, emphasized the company's commitment to disciplined capital deployment and capital protection. 'As the fundraise progresses toward its final close, our focus remains on disciplined capital deployment, capital protection, and building long-term investor relationships,' Athreya said. The fund will be deployed in performing credit opportunities in the residential sector, with a strong emphasis on downside risk management through conservative loan-to-value structures and robust collateral coverage.
Since 2017, Sundaram Alternates has raised over Rs 3,800 crore across five real estate credit funds. The company has consistently delivered impressive internal rates of return (IRR) of 18-19 percent and has maintained a 'zero capital loss' record, even during challenging times such as the NBFC liquidity stress, the implementation of RERA and GST, and the global COVID-19 pandemic. This track record underscores Sundaram Alternates' commitment to prudent investment strategies and strong risk management practices.
The ESG-aligned nature of the fund is a significant differentiator in the market. As investors increasingly seek to align their investments with sustainable and responsible practices, Sundaram Alternates' focus on ESG principles positions the company to attract a broader and more diverse investor base. The fund's commitment to ESG not only enhances its appeal to socially conscious investors but also ensures that the projects it supports are aligned with long-term sustainability goals.
In conclusion, Sundaram Alternates' ambitious target to raise Rs 2,000 crore by March is a testament to the company's strategic vision and strong market position. With a proven track record of success and a commitment to ESG principles, Sundaram Alternates is well-positioned to continue its growth trajectory in the Indian real estate market.
