Europa Capital is looking to raise €750m for what will be the manager’s largest fund to date.
The investment manager will put a hard cap of €1bn on its Europa Fund V vehicle.
San Diego City Employees’ Retirement System is looking to commit $20m (€18.1m) to the value-add fund, according to a board meeting document.
Europa Capital raised €730m for its Europa Fund III in 2007.
The company is targeting a 15% net IRR for the eight-year fund, leveraged at a 65% loan-to-value ratio.
The general partner’s co-investment is 10% of the total commitments, up to a maximum of €50m.
The fund will have an investment period of four years from the initial closing date.
Fund V, which has a city-centric investment rationale, will focus on the UK, France and Germany.
It will also invest in Spain, Italy and Ireland on a selective basis.
The fund will invest in existing office, retail, industrial and residential assets that offer potential for capital appreciation through repositioning of capital-neglected properties.
The goal is to later sell properties as core assets.
San Diego City is considering its commitment on the recommendation of real estate consultant Aon Hewitt.
The consultant wrote in a board meeting document that Europe’s economic recovery was gaining momentum, supported by cheaper oil, a weak euro and aggressive monetary policy from the European Central Bank.
European GDP growth last year was projected to be 1.8%, the fastest annual growth since 2010.