Private placement fund, also known as the fund raised from a specific target, refers to the fund set up by raising funds from a few investors in a non-public way, and its sales and redemption are conducted through private consultation between the fund manager and the investors. Private equity funds have the following advantages: 1. Since private equity funds are raised by a few specific targets, their investment objectives may be more targeted, more like tailor-made investment service products for customers, which can better meet the special investment requirements of customers. 2. Because the government has different regulatory requirements for private equity funds, the investment of private equity funds will be more flexible. 3. Private equity funds don't have to disclose detailed investment portfolios regularly like Public Offering of Fund, so the investment is more hidden and the income may be higher. Private equity funds also have some shortcomings: 1. Due to the imperfect information disclosure of private equity funds, it is not conducive to the protection of the interests of fund holders. Although private equity funds may get better returns, they also involve greater risks. According to relevant data, a major feature of hedge funds is that their investment strategies are absolutely confidential. In addition to verbally introducing the basic operation and previous investment returns to investors, fund managers do not need to disclose which market and which aspect they are speculating in beforehand or afterwards. It can be said that investors invest in hedge funds entirely out of trust in fund managers. Therefore, there is a great agency risk in private equity funds. 2. Due to the imperfect information disclosure of private equity funds and less government supervision, it is impossible to completely avoid illegal activities such as insider trading and market manipulation of private equity funds. In severe cases, it may affect the overall stability of the capital market. At present, if the private equity fund is launched in China, it will have a far-reaching impact on the fund industry and the securities market in China. For the existing fund management companies, this is both an opportunity and a challenge. On the one hand, the introduction of private equity funds has increased the variety of funds, and the business of fund management companies will be expanded; On the other hand, with the introduction of private equity funds, other qualified institutions, such as investment consulting companies, can also serve as fund managers, which undoubtedly increases the competition in the fund industry. But in any case, the biggest beneficiaries of the introduction of private equity funds and the development of China's fund industry should be fund investors. Third, the problems that should be paid attention to in the development of private equity funds First of all, if private equity funds are to be developed, the guiding ideology should be gradual, and the steps should not be too big at the beginning. Secondly, there should be strict restrictions on the management subjects of private equity funds, and the management risks should be prevented to the greatest extent before fund management, so that the management of private equity funds can have a good market order. Third, strictly limit the qualifications of investors. The characteristics of private equity funds require investors to be mature and qualified, so that investors can invest in private equity funds and bear the risks of private equity funds. When we say mature, we must at least have a certain capital scale and a rational investment concept. At present, the introduction of private equity funds must have stricter legal provisions. For example, the minimum investment limit for private equity fund investors should be greatly increased. Finally, there should be specific regulations on the information disclosure of private equity funds to prevent a large number of private equity funds from escaping the supervision of Public Offering of Fund.