Access Asia is setting up a $150 million private equity fund to focus on small to mid-cap deals between $8 million and $12 million in India.

The private equity manager says it has already received soft commitments of $30 million and expects a first close before the end of the year.

"We think that in India, this is an attractive niche which sees significantly lower valuations and greater deal flow,” says Nilesh Mehta, a co-founder of the firm along with Sangeeta Modi.

“Our strategy is to aim for significant minority stakes in high-growth, mid-cap companies. We expect our exits largely from trade sales/secondary sales and therefore will focus on knowledge or brand-based manufacturing and services.”

Access Asia will focus on five sectors that it and its operating partners (a group of successful Indian entrepreneurs with whom it has had a long-standing association) are familiar with: life sciences, infrastructure services, media, information technology and light engineering.

Access Asia plans to become actively involved in the companies in which it invests, and points out that it's not unusual to see companies growing at 40% to 70% per year in that small to mid-cap segment.

Mehta and Modi worked together at Aureos India, a $100 million fund anchored by CDC in the UK. They left Aureos in 2009, at the end of the commitment period. That team had closed five transactions, of which two have profitably exited.

Before working at Aureos, Modi worked for GE Capital in India. Mehta has worked in private equity investing for the past 12 years. Prior to Aureos India, he managed a smaller fund named Infinity II Venture Fund between 2001 and 2005, in partnership with Advent International. That fund returned 25.5% IRR. Before then he invested in India from 1992 to 2000 on behalf of clients of Meghraj, a private bank based out of London.