He said the fund hopes to raise $100 million by December and it will be invested in sectors like IT, services and pharmaceutical.This would be the second India specific fund of Baring Private Equity, which is sponsored by ING Group. Awasthi said the fund will be raised from foreign institutional investors, pension funds and overseas corporate bodies.

Baring Private Equity will raise the funds from investors in US, Europe, middle-East and Japan, he said, adding "we will be investing in companies promoted by Indians in both US and India". Asked whether the fund would invest in dotcom companies, he said Internet portals providing business to customers (B2C) e-commerce will not be on the investment map of baring."B2C e-commerce portals will not be on our investment agenda both in India and overseas," Awasthi said. However, the fund will make selective investment in companies that provide business to business e-commerce, he said. Awasthi said normally the private equity fund was looking at three to five years of investment before exiting.

The first fund of Baring Private Equity had a $30 million size and was started in 1997.

The private equity funds notable investment in India included 52 per cent stake in Bangalore-based BFL Software Ltd. Awasthi said that Baring Private Equity will continue to hold the 52 per cent stake in BFL Software after its proposed merger with U.S-based Mphasis Corp. Baring Private Equity also had taken equity in Jyothi Laboratories, makers of Ujala. Asked how long it would take baring to fully invest the $100 million fund, Awasthi said "there are lot of deals happening in areas we are interested. The investment opportunities are more now than ever before." "The market is more receptive to private equity deals, which was not the case when we came with the first fund," he said pointing out that when Baring Private equity's $30 million fund started operations, the deals were few and far between.