India and China are expected to see the highest-ever rise in private equity investments from new and existing investors over the next two years, a survey by global PE firm Coller Capital said.
As per the bi-annual survey of trends in private equity, investors -- mainly from Europe -- plan to boost their exposure to the Asia-Pacific region over the next three years.
"Of those, China and India will see by far the largest increase in PE investment from new and existing investors ...over the next two years," the Global PE Barometer report stated.
The survey revealed that 44 per cent of the global PE investors surveyed want to either expand or invest in India, while 53 per cent plan to do the same in China.
Just 20 per cent of the investors preferred Australia, even though most seemed to view it as the most attractive destination for buyout investments in the Asia-Pacific region.
According to an earlier industry report, investments of PE firms had risen fastest in 18 months to USD 2 billion in the January-March quarter this year. This was higher than their contribution of USD 620 million in the same period in 2009.
Despite the fall in returns over the past year, most PE investors across the globe are bullish on new investments.
Nearly two-thirds of the investors surveyed globally plan to increase their new commitments in private equity through 2010 and 2011, the survey found.
"It's natural to ask why investors are maintaining or strengthening their commitment to private equity after a big fall in returns. The simple answer is that private equity investment is a demonstrably skill-based activity for
Limited Partners and General Partners alike, and the credit crunch and recession have been a useful -- if painful -- learning experience," Coller Capital CIO Jeremy Coller said.
Limited Partner (LPs) refers to an private equity investor who does not have a say in the management of the partnership, but reaps returns on his/her investment.
Among the investors surveyed, 51 per cent made net returns of 10 per cent or lower from their PE portfolios since they began investing in the asset class, compared to just 22 per cent of limited partners two years earlier.
The barometer gives an overview of the plans and opinions of around 110 institutional investors in private equity (Limited Partners) across the North American, European and
Asia-Pacific regions.