India’s inaugural ESG real estate fund, SA Real Estate Credit Fund V from Sundaram Alternates, has amassed capital commitments exceeding Rs 1,000 crore. The fund, which was launched in October 2025, achieved this milestone in just three months. Fundraising continues, with a targeted final close of Rs. 1,500–2,000 crore by March 2026.
Karthik Athreya, Managing Director of Sundaram Alternates, observed, “Securing Rs. 1,000 crore within three months highlights investor trust in our underwriting standards and risk management protocols. This achievement stems from nearly a decade of investment in a dedicated credit risk platform. As we progress to final close, emphasis will stay on measured capital deployment, principal protection, and sustained investor partnerships.”
The investor base spans insurance companies, family offices, corporate treasuries, and ultra-high-net-worth individuals, reflecting broad institutional and high-net-worth participation. A key component is the sponsor commitment from the Sundaram Finance Group, which underscores aligned incentives between managers and investors.
Fund V pursues a performing credit approach, extending senior secured, amortizing loans primarily to brownfield residential projects that demonstrate stable cash flows. These include mid-market developments in Tier-1 and Tier-2 cities, with loan-to-value ratios conservatively capped at 65–70% and collateral backed by registered mortgages on completed or near-completion assets. This structure facilitates downside protection amid India’s real estate sector recovery, where residential demand has risen 15–20% year-over-year per ANAROCK data.
Sundaram Alternates’ track record in real estate credit dates to 2017, with Rs. 3,800 crore raised across five funds and a consistent zero capital loss history. Total deployments reach Rs. 4,140 crore over 73 transactions, yielding an average contracted IRR of 19.1%. The firm has executed 34 exits totaling Rs. 1,829 crore, delivering an average exit IRR of 20.4% without principal erosion. This performance exceeds industry benchmarks, where average real estate credit IRRs hover at 16–18% amid rising interest rates.
The ESG alignment integrates environmental (eg, green building certifications), social (eg, affordable housing focus), and governance (eg, transparent reporting) criteria, positioning the fund to capture growing demand from sustainability-focused allocators in India’s $200 billion real estate debt market.
