HONG KONG/SINGAPORE, Oct 3 (Reuters) - Blackstone Inc ( BX )

, the world's largest alternative asset manager, has

started raising its third Asia-focused private equity (PE) fund,

targeting at least $10 billion, two people with knowledge of the

situation said.

The new buyout fund, Blackstone's third in Asia, will

primarily focus on India with the largest percentage of capital

allocated there, the sources said, declining to be named as they

were not authorised to speak to the media.

China will not be a market for the new fund, the sources

said.

Japan and Australia will be two other significant markets

for Blackstone while it continues to look at other countries

such as South Korea and Singapore, they said.

The capital allocations of Blackstone's new Asia PE fund

would not be set in stone, however, and strategy could shift

based on the macroeconomic environment, one of the sources said.

Blackstone declined to comment.