Stockbridge Capital Group has held a first close on its Stockbridge Value Fund III, raising $250m (€230m), according to sources familiar with the matter.

Seven investors have joined fund, including the Texas Municipal Retirement System, which committed $50m – as reported earlier this month.

Two of the investors are new clients for Stockbridge. All but one of the existing investors in Value Fund II has is investing in the new fund.

Stockbridge, which did not comment, began fundraising in September of last year. It has another 12 months to raise additional capital. Fundraising will be limited to $500m.

Stockbridge will look to invest across apartments, retail, office and industrial markets, mainly on the east and west coasts of the US.

It will invest in assets that can be improved through a renovation, expansion or re-positioning, and will target a gross internal rate of return between 12% and 15%.

Stockbridge is has started to seek assets for the fund and has a shopping centre under contract.

The property is in the southern region of the US and has capacity to be expanded.