1. In terms of fund raising, it is mainly raised by a few institutional investors or individuals by private placement, and its sales and redemption are carried out by the fund manager through private consultation with investors. In addition, the investment method is also carried out in the form of private placement, which rarely involves the operation of the open market and generally does not need to disclose the details of the transaction.

2. More equity investment is adopted, and debt investment is rarely involved. Therefore, PE investment institutions enjoy certain voting rights in the decision-making management of the invested enterprises. Reflected in investment instruments, common stock or transferable preferred stock and convertible bonds are commonly used.

3. Generally investing in private companies, that is, unlisted companies, and rarely investing in publicly issued companies, will not involve the obligation of tender offer.

4. It is more inclined to a molding enterprise that has formed a certain scale and generated stable cash flow, which is obviously different from VC.

5. The investment period is long, generally reaching 3 to 5 years or longer, which belongs to medium and long-term investment.

6. The liquidity is poor, and there is no ready-made market for the transferor of a non-listed company to directly reach a deal with the buyer.

7. There are many sources of funds, such as wealthy individuals, venture funds, leveraged M&A funds, strategic investors, pension funds and insurance companies.

8.PE investment institutions mostly adopt limited partnership system, which has good investment management efficiency and avoids the disadvantages of repeated taxation.

9. Diversification of investment exit channels, including IPO, transaction sale and merger and acquisition; A), the target company management repurchase, etc. Although PE and VC are both investments in pre-listed enterprises, they are quite different in investment stage, investment scale, investment concept and investment characteristics. The main differences are as follows:

Many traditional VC institutions have also set foot in PE business, and many institutions that are traditionally considered to specialize in PE business have also participated in VC projects, which means that PE and VC are only a conceptual distinction, and the boundary between them is becoming more and more blurred in actual business.

In addition, we should also make clear the difference between PE funds and so-called "private equity funds" in the mainland. As mentioned above, PE funds mainly invest in the shares of unlisted companies in the form of private equity, and what we call "private equity funds" mainly refers to funds that raise funds from investors through private equity and manage them, and invest in the securities market (mostly the secondary market), which is mainly used to distinguish mutual funds in Public Offering of Fund.