Private equity investment (private equity investment), referred to as "PE", from the perspective of investment methods, refers to equity investments in private companies, that is, unlisted companies, through private equity. During the transaction implementation process, future exit mechanisms are also taken into consideration.

, that is, making profits from selling shares through listing, mergers and acquisitions, or management buybacks.

The Chinese translations include private equity investment, private capital investment, industrial investment funds, private equity financing, direct equity investment, etc. These translations more or less reflect the following characteristics of private equity investment: ● Equity in non-listed companies

Investment is regarded as a long-term investment due to poor liquidity, so investors will require higher returns than those in the public market. ● There is no listed transaction, so there is no ready market for the equity transferor of an unlisted company to directly reach a deal with the buyer.

Investors who hold currency to invest and companies that need to invest must rely on personal relationships, industry associations or intermediaries to find each other. Funds come from a wide range of sources, such as wealthy individuals, venture funds, leveraged buyout funds, strategic investors, pension funds,

Broadly defined PE, such as insurance companies, covers equity investments at various stages before an enterprise's initial public offering, that is, investment in enterprises in the seed stage, start-up stage, development stage, expansion stage, maturity stage and Pre-IPO. Related capital

According to the investment stage, it can be divided into: venture capital, development capital, buyout fund, mezzanine capital, turnaround, pre-IPO capital (such as bridge finance), and others such as

Post-IPO private investment (private investment in public equity, or PIPE), distressed debt, real estate investment (real estate), etc.

PE in the narrow sense mainly refers to the private equity investment part of mature enterprises that have formed a certain scale and generate stable cash flow. It mainly refers to the private equity investment part in the later stage of venture capital investment, among which M&A funds and mezzanine capital are the largest in terms of capital scale.

accounts for the largest part.

PE in China mainly refers to this type of investment.

There are three main ways of investment return, including: public offering and listing, sale or mergers and acquisitions, and company capital structure restructuring.

For companies that attract investment, private equity financing not only has the benefits of long investment period and increased capital, but may also bring management, technology, market and other needed professional skills to the company.

If the investors are large, well-known companies or well-known financial institutions, their reputation and resources will be beneficial to increasing the listed stock price and improving the performance of the secondary market when the company is listed in the future.

Secondly, compared with the volatile and unpredictable public market, the equity investment capital market is a more stable source of financing.

Third, in the process of introducing private equity investment, it is very important to keep confidentiality from competitors because the information disclosure is limited to investors and does not have to be made public like a listing.

Private equity investments are highly targeted and public information is extremely limited.

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For more information, you can check the private equity channel of "Haomai Fund Network".