Asia maintained its share of private equity investments last year, accounting for 15% of global transaction volume and $38 billion in deals, according to a report, State of the Asian Private Equity Markets.

The figure was down only slightly from Asia’s global share of 16% in 2011, says the study, published by SCM Strategic Capital Management, a Swiss institutional investment adviser specialising in private markets.

By comparison, the more established US and European PE markets accounted for 60% and 23% of global deal volume, respectively.

Greater China comes top in the region with 46% of PE deal volume last year, followed by India (14%), Japan (13%), Southeast Asia (10%), Australia/New Zealand (8%) and South Korea (6%).

While Greater China PE investment is expected to remain strong this year, India and Japan may see a drop in transaction volume in the near term.

“China is the largest private equity market in Asia. Its pricing environment is attractive, and returns have been stronger than other emerging markets, such as India,” says Joseph Chang, head of the Hong Kong office at SCM.

Meanwhile, India and Japan may fall short of investor expectations due to ongoing fundamental issues, notes the firm.

Despite a renewed interest in Japan this year due to the launch of aggressive economic stimulus measures, SCM is bearish on Japanese private equity because it feels there is not enough deal flow.

The country’s corporate sector has not yet fully embraced private equity, leaving some domestic PE managers unable to deploy capital. This has led to a reduction in fund size or even the closure of some firms, notes Chang.

India has different issues, with rupee depreciation affecting the returns of dollar-denominated PE funds that have invested in the market. Moreover, valuations are relatively high, and there is a lack of seasoned PE executives with experience in improving the operations of their Indian portfolio companies, says SCM.

The firm sees Australia as having comparatively more PE opportunities in the longer term, given its vast mineral and mining reserves. While growth rates in India and China are slowing, they still require natural resources, says Chang.

Other deals could be found in Australia’s consumer and retail sectors. While they are still relatively weak compared to other Asia-Pacific markets, valuations are at a historical low, he says. “There may be some distressed or turnaround opportunities.”