October 6, 2025

Sundaram Alternates (SA), the alternative investment arm of Sundaram Finance Group, has done it again! They have successfully closed their second real estate credit fund called Sundaram Alternative Opportunities Series – High Yield Secured RE Debt Fund II (SA RE Credit Fund II). This fund gave investors a fantastic gross IRR of 17% after exiting its portfolio worth about ₹435 crore. What’s the secret sauce? The fund only invested in fully secured, high-yield debentures issued by Indian real estate developers. The focus was mainly on hot South Indian micro-markets. The company said, “The fund pursued a highly 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 per cent, and delivering a zero capital losses track record even through challenging market cycles between 2019 and 2023, including the Covid period.” This disciplined strategy helped them sail smoothly through testing times like the Covid waves and even the NBFC crisis. The platform has made a total of 38 full exits and over 10 partial exits, collecting a whopping ₹2,600 crore over the past eight years! Over time, SA has built a powerful legacy comprising over 70 deals across four real estate credit funds, with contracted IRRs hitting 19%. Karthik Athreya, Director at Sundaram Alternates, said, “The successful closure and exit of SA RE Credit Fund II underscores our commitment to delivering strong risk-adjusted returns while prioritising capital protection. Our disciplined investment approach and unique underwriting methodology have enabled investors to achieve consistent, quarterly cash yields even during challenging market conditions.” He also added, “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.” The real estate platform’s total capital raise now exceeds ₹2,600 crore, and Sundaram has deployed over ₹4,200 crore across 74 deals. On the bigger stage, Sundaram’s alternative investment platform manages over ₹7,000 crore in assets under management across private credit, liquid fixed income, and equity strategies. This success story shows how smart, disciplined investing in real estate debt can give steady, shining returns, even in rollercoaster market cycles!

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Tags: Sundaram alternates, Real estate credit fund, High yield, Private credit, Karthik athreya, Investment returns,