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Sundaram Alternate Assets plans to raise ₹1,000 crore through its third series of real estate fund – High Yield Secured Real Estate Fund III.
It is a five-year close-ended Category-II Alternative Investment Fund and is currently open for subscription. The fund targets to raise ₹750 crore with a green shoe option of ₹250 crore. Minimum investment in this fund is ₹1 crore.
It will invest in cash generating real estate assets and selectively acquire portfolios of distressed assets, secondary debt securities and NCDs from stressed financiers. The fund is sponsored by Sundaram Finance.
With a gross portfolio Internal Rate of Return of 19 per cent, the first series of High-Yield Secured Debt Fund-I has repaid 61 per cent of capital in less than 3 years since final closing. The fund has been distributing interest income quarterly to investors despite the challenging Covid environment.
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Portfolio construction
The second series of the fund was recently closed and is currently in the phase of active portfolio construction. It distributed income amounting to 10.3 per cent of drawn capital to its investors as interest coupons over the last one year.
It will invest predominantly in South India with opportunistic investments in Maharashtra and NCR.
Sunil Subramaniam, Managing Director, Sundaram Asset Management Company said supported by policy makers and driven by transparency and returns, the Indian real estate sector has attracted inflows from foreign institutional and private equity players.
“By 2025, the real estate sector is projected to represent 13 per cent of India’s GDP. The time is ripe for an entry into this space,” he said.
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