In the practice of private equity investment in China,how to valuate is a significant problem, and sink into a dilemma.

As the private equity itself has non-transparent, non-liquid characteristics, it faces many endogenetic and exogenous risks in the operation process.

Private Equity (PE) is now a new thing with rapid growth rate and playing an important role in Chinese capital market.

Therefore,private equity is a main channel to expand the scope of participators.

In Europe, private equity, after being introduced from the original USA market into this ancient piece of land, has gone through decades of years in its starting, propering, developing and maturing as well as forming its unique features.

Private equity capital is not only for the finance industry to provide funds, but also to provide some management experience and market strategy consulting, so it is an important thing to introducte the Private equity capital financing in Xinjiang.

This paper sets forth on the analysis of development of private equity funds in China, comparing the legislation of different countries, and comments on the problems of private equity funds in our capital market at the present.

Along with China’s rapid economic development, the private equity fund, as a new type of financial intermediaries, has begun to play an increasingly important role in the financial market.