Sundaram Alternatives’s third real estate fund launched

Sundaram Alternatives has launched its third real estate fund, Sundaram Alternative Opportunities Series–High Yield Secured Real Estate Fund-3, an alternative investment arm of Sundaram Asset Management Company Ltd (SAMC), owned by Sundaram Finance Ltd, a leading non-banking financial company in India. The real estate concentrated fund is a five year close-ended Category-2 alternative investment fund (AIF). A press release issued by the company told the media that SA's High-Yield Secured Debt Fund-1 had repaid approximately 61% of capital in less than three years since final closing with a gross portfolio Internal Rate of Return (IRR) of around 19%. It added that the fund quarterly distributed the interest income to investors and continued to do so despite the problematic Covid-19 environment. The second real estate fund, which is High-Yield Secured Debt Fund-2, has been closed recently and is in the phase of active portfolio construction currently. The release added that the fund has already distributed income of drawn capital amounting to 10.3% to its investors as interest coupons over the last more than one year. The fund is going to invest in debentures and mezzanine securities of Indian entities supported by real assets that might include real estate, logistics, hotels, and healthcare facilities. Investments will largely be supported by hard real estate collaterals, access to cash flows, and other securities designed to protect capital and return attractive IRRs on a gross basis. The target size of the find is Rs 750 crore, plus a greenshoe of Rs 250 crore. The minimum investment in this fund is Rs 1 crore. The head of the strategy (alternative credit)is Karthik Athreya, and Kumaran Chandrasekaran will manage the fund. The fund's sponsor is Sundaram Finance, and the fund is open for subscription to domestic and international sophisticated investors. Sundaram Alternate Assets Ltd (SA) is a 100% subsidiary of SAMC. Image Source Also read: Assets over Rs 3.5 trillion to be monetised via InvIT, REIT in next one year Also read: Model Tenancy Act approved: Here’s what the industry thinks