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MUMBAI : Sundaram Alternates has launched the Sundaram Alternative Opportunities Series–High Yield Secured Real Estate Fund III. Sundaram Alternate Assets Ltd (SA) is a 100% subsidiary of Sundaram Asset Management Company Ltd (SAMC), which is in turn owned by Sundaram Finance Ltd, a leading non-banking financial company in India.

Sundaram Alternates currently manages two real estate funds. With a gross portfolio IRR (internal rate of return) of around 19%, SA’s High-Yield Secured Debt Fund I has repaid approximately 61% of capital in less than 3 years since final closing, a press release issued by the company said. The fund has been distributing interest income quarterly to investors and has continued to do so despite the challenging covid-19 environment, it added. The second real estate fund, High-Yield Secured Debt Fund-II, was recently closed and is currently in the phase of active portfolio construction. The fund has already distributed income amounting to 10.3% of drawn capital to its investors as interest coupons over the last more than one year, the release added.

Sundaram Alternative Opportunities Series–High Yield Secured Real Estate Fund III is a five-year close-ended Category II Alternative Investment Fund (AIF). The fund will invest in high yielding debentures and mezzanine securities of Indian entities backed by real assets that may include real estate, logistics, hotels and healthcare facilities. Investments will predominantly be backed 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 fund will invest predominantly in south India with opportunistic investments in Maharashtra and NCR, a press release issued by the company said.

The fund’s target size is 750 crore (plus a green shoe of 250 crore). Minimum investment in this fund is 1 crore. Karthik Athreya is the head of strategy (alternative credit) and the fund will be managed by Kumaran Chandrasekaran. The fund is open for subscription to domestic and international sophisticated investors. The sponsor of the fund is Sundaram Finance.

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