Texas Municipal Retirement System is investing in Stockbridge Capital Group’s latest fund, as part of plans to invest $400m (€375m) in real estate this year.

The pension fund is committing $50m to Stockbridge Value Fund III, according to a board meeting document, alongside a $50m investment in another fund, IC Berkeley Partners IV.

Stockbridge did not comment, but according to industry sources the real estate manager is targeting $400m to $500m for the fund.

It started fundraising in September of last year and expects to have a first close in the coming weeks.

Texas Municipal said Stockbridge had been a top-quartile performer. Its investment in Stockbridge’s 2012 fund has returned more than its capital base to date.

Its latest fund will target returns of 12% to 15%, gross of fees. 

Stockbridge plans to acquire existing office, industrial, retail and apartment assets in major markets, predominantly on the east and west coasts of the US.

It plans to invest in properties that are under-valued, under-used or not operating at full potential.

IC Berkeley Partners IV, in which Texas Municipal is also investing $50m, is a fund targeting light industrial assets in the US.

It will look at buildings leased to multiple tenants with around 120,000sqft in infill locations.