Total Asian private equity funds under management rose by almost 30% in 2006 to US$158bn, up from US$122bn in 2005. At the same time, investments for the year were up 122% to US$67.4bn, from US$30.4bn in 2005.

These Asian Venture Capital Journal (AVCJ) figures give a clean bill of health to the sector going into 2007, as law firms go full throttle to capture a bigger share of the market.

"The doubling of investments over the year shows Asia is producing enough deals to absorb the capital recently raised for this regional market," AVCJ managing editor Paul Mackintosh says.

New funds raised for Asia rose 35.4% during 2006, to US$32bn from US$23.6bn in 2005. In volume rather than individual fund size, Australia and China both received the most attention from specially targeted funds.

The biggest funds in the region at the end of 2006 were Avenue Asia Special Situations Fund IV (US$3.1bn), followed by Carlyle, with Carlyle Asia Partners II (US$1.8bn) and Carlyle Japan Partners II (US$1.88bn), and MBK Partners I at US$1.56bn.

Investment into Australia rose by 962%, off the back of the US$8.7bn buyout of Qantas airlines and other deals, while India saw a rise of 252% and Taiwan managed a whopping 4435% growth, after a US$1.3bn investment into Eastern Multimedia.

However, investment into China slackened, down 13% between 2005 and 2006, which the AVCJ says reflected the end of the run of huge pre-IPO minority investments into the Big Four mainland banks, though the underlying trend is still upwards.

Interestingly, private equity-backed IPOs showed a big boost over the year, at US$48.5bn, a 213% increase. "A strong flow of IPOs indicates that the new investments will eventually yield profitable exits," Mackintosh says.