Sundaram Alternates Assets (SAA), the private equity arm of Sundaram Finance Group, is looking to raise about Rs 1,000 crore from global investors to fund green real estate projects in India. The firm is currently in the process of raising money through its Series IV real estate credit fund, which will invest in projects that adhere to environmental, social and governance (ESG) and climate impact standards.
What is the Series IV real estate credit fund?
The Series IV real estate credit fund is a five-year close-ended Category-II Alternative Investment Fund (AIF) that aims to provide high-yield returns to investors by lending to select developers in Tier-I cities. The fund targets to raise Rs 750 crore with a green shoe option of Rs 250 crore. The fund will focus on residential and commercial projects that are either certified green or have the potential to become green.
Why is Sundaram Alternates Assets investing in green real estate?
Sundaram Alternates Assets believes that green real estate is the future of the industry, as it offers multiple benefits to developers, investors, end-users and the environment. Green real estate projects can reduce operational costs, enhance asset value, improve occupant health and well-being, and mitigate climate risks. SAA also expects that green real estate will attract more demand and premium pricing in the post-pandemic scenario, as consumers become more conscious of sustainability and wellness.
Who are the investors in the fund?
SAA has received interest from global investors including NRIs in the Gulf region, North America, and Southeast Asia for its Series IV real estate credit fund. The firm has also partnered with leading ESG and climate impact advisors to ensure that the fund meets the highest standards of responsible investing. SAA has a track record of raising and deploying about Rs 3,000 crore in its private credit business over the last 5-6 years, delivering 18-20 per cent portfolio returns and 17 per cent gross investor returns.
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