Europa Capital has raised €360m in a first close for its fifth fund, IPE Real Estate understands.

The investment manager is looking to raise €750m for what would be the company’s largest vehicle to date.

It is understood that Europa Capital will put a hard cap of €1bn on Europa Fund V, which has a value-add approach and is focusing on the UK, France and Germany.

The fund manager did not comment.

San Diego City Employees’ Retirement System is looking to commit $20m to the eight-year fund, as reported by IPE Real Estate last month.

As previously reported, the company is targeting a 15% net IRR for the fund, leveraged at a 65% loan-to-value ratio. The general partner’s co-investment is 10% of total commitments, up to a maximum of €50m.

Europa Capital raised €730m for its Europa Fund III in 2007, while its fourth fund is almost fully invested.

King & Wood Mallesons partner Steven Cowins, a lawyer advising Europa Capital on the fundraising, said there is an “underlying trend that there are fewer new fund managers” compared to this point in the last market cycle.

“Instead, a smaller group of managers are raising more capital,” Cowins said.

“This may partially be because increased regulation means that smaller funds – which first time funds tend to be – are more costly and burdensome for smaller houses to launch.”

Cowins also said this might also be compounded by a “self-fulfilling prophecy” whereby smaller managers “take the view that they have quicker speed to market doing a joint venture with an established manager than trying to launch a new vehicle on their own”.

He cited the recent launch of a debut fund by start-up manager Paloma Capital as “contrary to that trend”. The company, set up by former Schroders fund manager Joe Froud and Helical Bar directo Jack Pitman, raised €100m in a first close last December.