Private equity funds are funds raised by private individuals or directly from specific groups. The operation mode of private equity fund is equity investment, that is, through capital increase and share expansion or share transfer, the shares of unlisted companies are obtained, and profits are made through share value-added transfer. The goal of private equity fund is to pursue absolute return and excess return. But at the same time, private investors have to take higher risks. A notable feature of private equity funds is that fund sponsors and managers must invest their own funds into fund management companies, and the success of fund operation is closely related to their own interests.

Private placement bond is a bond raised by a few investors who have a specific relationship with the issuer, and its issuance and transfer have certain limitations. Private placement bond's issuance procedure is simple, so it can't be traded in the securities market. Compared with public offering, there are certain restrictions on the issuance in private placement bond, and the private offering targets are limited professional investment institutions, such as banks, trust companies, insurance companies and various foundations. Generally, these professional investment institutions have experienced experts who are capable of fully investigating and studying bonds and their issuers, and issuers and investors are familiar with them, so they do not require public display, that is, private placement does not adopt an open system. Generally, the purpose of purchasing private placement bond is not to resell it, but to keep it as a financial asset.