By Peter Apps

LONDON (Reuters) - Distressed debt in emerging markets is now harder to find than in developed economies, asset manager Ashmore says, but its "special situations" funds see good growth in emerging private equity.

Ashmore's Global Special Situations Funds started a decade ago picking up distressed corporate debt in developing economies and helping companies achieve profitable returns -- but now that market barely exists.

But with the more debt-heavy Western economies experiencing problems, the fund says it is still seeing good returns with the majority of its $8 billion (4 billion pounds) deployed funds used in private equity to buy stakes in firms in the world's still fast-growing areas.

"A decade ago there was a lot of distressed debt in emerging markets but now you find most of the distressed debt is in the G7 (major global economies)," Booth told Reuters in a telephone interview. "Going forward the bulk is going to be private equity."

Ashmore says emerging private equity has proved to be a much more reliable asset class than listed equities in volatile stock markets.

Benchmark global emerging equities .MSCIEF are down almost 12 percent this year -- and despite ongoing high economic growth and demand, Chinese stocks .SSEC have lost almost 50 percent.

Despite that, China remained probably Ashmore's leading emerging private equity market, Booth said, with India, Indonesia, the Philippines, Thailand, Turkey and Russia following behind.

Key new markets were seen as Ukraine, the Gulf economies and Latin America, he said, with investments in India looking set to grow well beyond their current $1 billion.