* PAG started sounding out investors in recent weeks - sources
* New fund will be its third and largest to date
* Global, regional PE funds raise record funds for Asia deals (Updates with PAG background)
HONG KONG, April 13 (Reuters) - Hong Kong-based private equity firm PAG is planning a new Asia fund that aims to raise as much as $6 billion, two people with knowledge of the plan said, potentially adding to a massive pool of buyout money for acquisitions in the region.
PAG has started sounding out investors about the fund in recent weeks, the two people and others told Reuters. The firm raised $3.6 billion with its second Asian fund in 2016 and the third fund will be its largest to date.
PAG has not yet formalised the fund size or the fundraising schedule, the people said, adding that the plan is subject to change.
A spokesman for PAG said the information is incorrect, without elaborating. He declined to comment further. The people declined to be identified as the fundraising plan was confidential.
A slew of global and regional private equity firms have raised or are raising record-level funds for investments in Asia or cross-border deals.
KKR & Co raised a $9.3 billion Asia-focused fund in 2016, the biggest in the region. Carlyle is reaching close for a planned $5 billion Asian buyout fund, while Blackstone is seeking to garner up to $3 billion in its first pan-Asia buyout fund, Reuters reported earlier.
PAG's regional peers such as Hillhouse Capital Group, Baring Private Equity Asia and Primavera Capital are all currently raising money for their own private equity funds, people with knowledge of the activities have told Reuters.
Private equity firms are looking to add cash reserves, or so-called dry powder, in the region, as investors worldwide allocate capital to catch growing market and economic momentum in countries from China to India and Indonesia.
Trade publication AVCJ first reported the PAG fundraising plan earlier on Friday, saying its target was $4.5 billion.
Founded in 2002 by Weijian Shan, a Chinese dealmaker who previously worked at TPG Capital and JPMorgan Chase & Co, PAG now manages more than $20 billion in capital.
The firm has struck a number of high-profile deals in the last two years, including its funding in a $1.6 billion deal by Key Safety Systems to acquire troubled Japanese air-bag maker Takata Corp.
Last year, it won the bid to acquire control of Hong Kong-listed Yingde Gases amid a rare public Chinese boardroom battle.
PAG also controlled China Music Corp, a music streaming business which in 2016 merged with the music business of gaming giant Tencent to form Tencent Music. The business, in which PAG made an initial $60 million investment and still holds a stake, is valued by some investors at $20 billion, Shan told a conference in Hong Kong last year.
PAG's first pan-Asia fund, raised in 2012, achieved a 19.9 percent net internal rate of return by the end of September last year, according to pension fund CalPERS. The firm is currently also raising a China-focused distressed debt fund with a target size of up to $300 million.
Last month, Blackstone announced it had acquired a passive minority stake in PAG, without disclosing the terms of the deal. (Reporting by Kane Wu; Editing by Edwina Gibbs and Muralikumar Anantharaman)