private partnership investment activities that have not been recognized by the relevant laws and regulations of the national financial industry supervision, if a complete contract is established between investors, is a private fund. It should be said that the law neither prohibits nor encourages it, and it is in a vague area. The private equity fund issued through trust companies is relatively reliable, because the fund supervision is effective, and there will be no situation of running away with money, so it is hard to say anything else. Private equity funds come out of the gray area. Because the law does not give private equity funds a chance to see the light of day, the legal compliance of private equity funds is questionable, which leads to the opacity of private equity funds. This opacity objectively aggravates the problems of corruption, fraud and even crime in private equity funds. From this point of view, the law itself is to prevent and punish crimes, but objectively it allows private equity funds to breed corruption, fraud and other criminal phenomena in gray areas. So where is the rationality and legitimacy of the existence of private equity funds? It is the need of the market, and the vitality of the capital market lies in the transformation of social savings into public investment. When the transformation process of social savings into stock investment becomes a major obstacle, some alternative transformation forms and channels emerge as the times require. Private equity fund's financial management on behalf of customers is a better transformation form and channel.