In the first half of 1990s, China's securities market gradually formed and developed, and private equity funds began to sprout. This stage mainly exists in the form of irregular trust relationship between securities companies and major customers. With the development of China stock market, the number of listed companies is increasing. In the middle and late 1990s, some listed companies entrusted idle funds to underwriters for investment, and many consulting companies became private equity fund traders. After 200 1, the China stock market quickly adjusted for more than four years. The original operation mode and investment ideas of private equity funds have been challenged by the market, and a large number of private equity funds have fallen. At present, the private equity industry has experienced painful adjustment and transformation. Affected by the market adjustment and the development of securities investment funds, the entrusted wealth management business of securities firms has been rectified, and legal private equity funds have begun to appear. At the same time, private equity funds operating in the traditional way are still developing quietly.