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Sundaram Alternates Assets (SAA), a subsidiary of Sundaram Finance Group, is embarking on a fundraising endeavour to secure approximately INR 1,000 crore from global investors, aiming to allocate these funds towards green real estate projects in India. Managing Director Vikaas M Sachdeva emphasised the importance of this move, highlighting SAA's dedication to leveraging its established track record, profound underwriting expertise, and adept risk management skills within the dynamic landscape of the Indian real estate credit market.
Over the past year, SAA has undertaken initiatives to enhance its high-yield credit funds, aiming to generate tangible alpha from its performing credit business. Additionally, the firm has embraced a high Environmental, Social, and Governance (ESG) framework and climate impact initiatives, positioning itself as a key advocate for responsible investing among its investor base.
Currently, SAA is actively engaged in soliciting capital from a diverse pool of global investors, including Non-Resident Indians (NRIs) in the Gulf region, through its Series IV real estate credit fund. Karthik Athreya, Director of Alternative Credit at SAA, expressed optimism regarding the fundraising efforts, projecting a targeted closure of the Series IV fund within the range of INR 1,000-1,200 crore, specifically earmarked for financing green real estate projects across India.
Notably, investor interest in the Series IV fund has been strong, with significant attention coming from the Gulf Cooperation Council (GCC), North America, and Southeast Asia. This increased interest reflects the expanding global demand for sustainable real estate investments and is consistent with SAA's strategic focus on promoting environmentally conscious development efforts.
Reflecting on SAA's past achievements, Athreya highlighted the firm's successful track record in raising and deploying approximately INR 3,000 crore in its private credit business over the preceding 5-6 years. Noteworthy performance metrics include consistent portfolio returns ranging between 18-20%, with current gross investor returns estimated at around 17%. These impressive returns show SAA's ability to deliver value to its investors while navigating the complexities of the real estate credit market.
Furthermore, SAA's credit funds have seen strong investor involvement, with a varied investor base that includes High Net Worth Individuals (HNIs), family offices, and corporate treasury. This broad investor engagement demonstrates SAA's confidence and faith in its investing strategy, as well as the perceived value of its real estate credit funds.
In conclusion, SAA's strategic initiative to raise funds from global investors for green real estate projects shows its commitment to responsible investing and sustainable development. With a proven track record, robust ESG framework, and strong investor interest, SAA is poised to make a meaningful impact in driving environmentally conscious real estate initiatives across India.
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