Private placement fund refers to a securities investment fund that raises funds from specific investors in a non-public way and invests in securities. Private equity funds are raised by means other than mass communication, and promoters set up investment funds to invest in securities by collecting funds from non-public multi-subjects.

Private equity funds in a broad sense include private equity funds in addition to securities investment funds. In China's financial market, "private fund" or "underground fund" is usually a collective investment that is privately raised by specific investors, as opposed to the securities investment fund that is supervised by the competent department of China government and publicly issues beneficiary certificates to unspecified investors. There are basically two ways, one is a contractual collective investment fund based on signing the entrusted investment contract, and the other is a corporate collective investment fund based on * * * contributing shares to establish a joint-stock company.