Mumbai: India has emerged as the most favoured private-equity destination attracting $1.24 billion worth of investments in January, surpassing China and Japan, according to a study published by the Asian Venture Capital Journal (AVCJ).

India topped the PE investment ranking in January-February leaving behind China with $609 million and Japan with $980 million.

With Asia Pacific region emerging as the most preferred destination for investment, the total private equity capital under management in Asia rose by almost 30 per cent in 2006 to $158 billion from $122 billion in 2005, the report said.

India also ranked among top 10 PE destinations in 2006 with a 252 per cent growth in investment over $7 billion in 2006 as against just $2 billion in 2005, the report said.

Australia with $25 billion worth investments, China with $7.7 billion and Japan with $10,4 billion were the top three destinations for private equity in 2006.

Interestingly, in terms of fund raising focused on specific markets, India faired quite well, while Australia and China were the most popular.

Fund raising for Australia rose 88.9 per cent during the year followed by China at 72.1 per cent, it said. India posted a decent increase of 37.6 per cent.

"It was a watershed year for Asia pacific (private equity)," KPMG Partner and COO for Advisory in Asia Paul Borough commented on the PE investment trend in 2006.

Meanwhile, a Thomson Financial report said Indian companies attracted $2.2 billion in private equity investments last year, the most in the Asia-Pacific region

Indian firms received the investments in 143 deals. Chinese companies emerged second with $1. 7 billion from 145 deals, and Singapore was third with $1.5 billion from 17 deals, the report said.

Australia took the fourth spot with $915 5 million from 91 deals, followed by Taiwan with $477.2 million from 14 deals.

Overseas investments in South Korean firms amounted to $306. 3 million in 12 deals while New Zealand companies received $271.5 million from 13 deals.

Vietnam emerged eighth with $85. 3 million investments from five deals, followed by Thailand with $91.9 million from four deals.

Loans to finance Asia-Pacific projects reached record $39.2 billion from 153 issues in 2006, an 82. 6-per-cent increase from the previous year. Australian companies were the most active borrowers with proceeds worth $10.7 billion from 41 issues. India and Japan were ranked second and third with $8.9 billion and $4.6 billion dollars, respectively.