Equity ("PE" for short) is usually called private equity investment in China. From the perspective of investment methods, according to the definition of relevant foreign research institutions, the equity investment in private enterprises, that is, unlisted enterprises, is carried out through private placement. In the process of transaction implementation, the future exit mechanism is considered, that is, through listing, mergers and acquisitions or management buyback, the shares are sold for profit. A few PE funds invest in the equity of listed companies (such as PIPE mentioned later). In addition, some PE investments, such as mezzanine, also use debt investment. However, the above accounts for only a small part, and private equity investment can still be defined as above.

Private equity investment in a broad sense is the equity investment covering all stages before the initial public offering of an enterprise, that is, the investment made by the enterprise in each stage of seed stage, initial stage, development stage, expansion stage, maturity stage and Pre-IPO, and the relevant capital can be divided into venture capital according to the investment stage.

Capital), development capital (development

Capital), M&A fund (buyout/buy)

Fund), mezzanine capital (mezzanine

Capital), turning losses into profits, pre-listing capital (such as bridge)

Finance), and other such as private investment after listing (private

investment

exist

public

Equity, that is, pipe), non-performing loans.

Debt and real estate investment (true

Estate) and so on (the concepts mentioned above also overlap). In a narrow sense, PE mainly refers to the private equity investment part of mature enterprises that have formed a certain scale and generated stable cash flow, mainly refers to the private equity investment part in the later stage of venture capital, in which M&A funds and mezzanine capital account for the largest part of capital scale. In China, PE refers to the latter to distinguish it from VC.