Private equity investment (PE) refers to equity investment in unlisted companies through private equity funds. In the process of transaction implementation, PE will consider the future exit mechanism, that is, through the company's initial public offering (IPO), mergers and acquisitions (M & amp； A) or MBO, etc Simply put, PE investment means that PE investors look for excellent and high-growth unlisted companies, inject capital into them, obtain a certain proportion of their shares, promote the development and listing of the company, and then make profits through the transfer of equity.

Leveraged buy-out (LBO) is a kind of buy-out, the essence of which is debt buy-out, that is, the buyer has only a little money, and borrows money to buy other companies, just like using leverage principle to lift heavy objects with less force. Financing acquisition is usually guaranteed by the acquired company or future cash flow, and sometimes the profit is not as good as expected and the risk is great. Because using the original small capital to buy a big company is like using the principle of leverage to lift heavy objects with little force, it is called leveraged buyout-Heng Chang.