Private equity (PE) in India has grown to about twice the value to $4 billion in the first quarter ended March 31 of the calendar year 2008, when compared to last year, maintaining its position as the hot destination in Asia (excluding Japan), and surpassing China that recorded just $570 million in investments so far, revealed a report by IndusView, an India-focussed cross-border advisory firm.

China received $13 billion in private equity investments in 2006 compared to $7 billion in India during the same period. The equation has changed since then, with India well in the lead now.

?With the economic downturn in developed economies intensifying and the application of capital becoming dearer and pressurising the expected Return on Investments (RoIs), PE firms are finding their way in to safer investment heavens, that is, emerging markets, which have decoupled from the developed markets.? says Bundeep Singh Rangar, chairman of IndusView, an India-focussed cross-border advisory firm.

The Indian real estate and infrastructure sectors have been key contributors to this increasing trend this year with 28% share in value at $1.12 billion of the total PE investments, followed by the power sector having received about 13% share with $520 million this year. The banking and finance and telecom sectors tied for the third most favourable sectors for investments with 8.7% of the deals at more than $340 million each, the report said.

Renewed interest in the Indian infrastructure sector has seen fresh fund raising of up to $8 billion in the pipeline this year with financial entities such as India?s State Bank of India (SBI), Australia-based Macquarie Capital Group Ltd, the UK-based private equity firm 3i Group, the US-based Blackstone Group among others, chipping in.

Global private equity funds such as Temasek Holdings (Pte) Ltd, the investment arm of the Singapore government; Blackstone Group LP, a global private equity and investment management firm; Warburg Pincus, with approximately $14 billion under management; The Carlyle Group, the Washington, DC-based private equity investment firm with more than $75 billion of equity capital under management; and Actis Capital LLP, a leading private equity investor in emerging markets with $3.5 billion of funds under management have mapped out investment strategies for the Indian market, the report said.