Generally speaking, M&A fund is a branch of private equity investment fund. Private equity investment refers to a form of investment that raises capital in a non-public way and invests in enterprise equity. Compared with seed stage, initial stage, expansion stage and Pre-IPO stage, private equity investment funds can be divided into angel funds, venture capital funds, growth funds and Pre-IPO funds. The investment in mature period and recession period of enterprises is mainly completed by M&A fund.

However, in foreign capital markets, private equity funds mainly refer to merger and acquisition funds, and the corresponding word is venture capital funds; In the domestic capital market, private equity investment funds mainly refer to the funds invested in the Pre-IPO stage. The main reason for the difference in the connotation of private equity investment funds is that private equity investment funds are not a suitable standard for classifying various investment funds. The characteristic of private equity investment is financing mode, while M&A fund emphasizes trading mode.

From the development history of private equity investment funds, private equity funds originated from M&A funds. Before 1990s, leveraged buyout was a typical trading mode adopted by M&A funds, namely leveraged buyout. Leveraged buyout reached its peak in 1980s and 1990s, then gradually shrank with the collapse of junk bond market, and then recovered in 2 1 century.