Private placement fund refers to a securities investment fund that raises funds from specific investors in a non-public way and invests in specific objects. The investment scope of private equity funds includes stocks, bonds, closed-end funds, open-end funds, central bank bills, short-term financing bills, asset-backed securities, financial derivatives and other investment products that can be invested as stipulated by China Securities Regulatory Commission.

Private equity funds are strictly supervised by the CSRC, and the investment direction and proportion are strictly limited, because private equity can easily become "illegal fund-raising". The difference between the two is whether to raise funds for the general public and whether the ownership of funds has been transferred. If more than 50 people are raised and transferred to personal accounts, it will be classified as illegal fund-raising.

In addition to private equity funds, there are Public Offering of Fund, which refers to securities investment funds that raise funds from public investors in an open way and mainly invest in securities. In China, it takes the form of contract organization. Under the supervision of the competent government departments, there are industry norms such as information disclosure, profit distribution and business restrictions.

The difference between private equity funds and Public Offering of Fund: 1, and the fundraising targets are different; 2. Different financing methods; 3. Different information disclosure requirements; 4. Different investment restrictions; 5. Different performance awards, etc. At the same time, there are great differences between the two funds in investment concept, mechanism and risk taking.