Despite the slowdown worldwide, investors are still confident on Asia’s continued growth through 2009. Private equity investors are increasingly investing in Asia as against other lucrative regions such as Central and Eastern Europe and Russia. According to the Emerging Markets Private Equity Association in 2008, funds focused on emerging Asian economies were the most popular accounting for 60 percent of the annual total as compared to 48 percent in the previous year. Funds focusing on central and eastern Europe and Russia fell in to 8 percent of the total in 2008, down from 25 percent in 2007.

According to the association, the value of the funds invested in emerging Asia also increased to US$66.5 billion in 2008 up 12 percent from US$59.1 billion in 2007. To add proof of a continued optimistic sentiment in emerging Asia London-based private equity firm Greater Pacific Capital announced plans to launch a new fund with a corpus of US$750 million to invest in India and China.

Investors seem optimistic on emerging Asia as deals are still being concluded in Asia, the market still continues to expand. “The private-equity model in emerging markets is about equity investments in growing companies — not leverage,” Sarah Alexander, the association’s president told the wall street journal. “Whereas the lending drought in the West resulted in stalled buyout markets, in emerging markets deals are still getting done,” she continued.

Nonetheless, the association did also warn that as the crisis deepens, fund raising could get difficult. “The bad news is that fund-raising in 2009 will be much more challenging. Western institutional investors are grappling with their own asset allocation issues, and the globalization of the financial crisis will impact expansion plans into new markets,” Alexander told Reuters.