Recently, the A-share market has experienced consolidation. Behind the simultaneous weakening of individual stock profitability and market sentiment is the collective hedging behavior of funds under the interweaving of internal and external factors. Faced with this adjustment, frontline private equity institutions have shown completely different strategies in response. Against the backdrop of the average position of private equity in stocks hitting a nearly 112 week high in mid November, some institutions chose to hold high positions, some used derivatives for risk hedging, and some actively adjusted their structures to lay out for the next round of market trends. Multi factor resonance triggers market adjustment. For recent market adjustments, first-line private equity firms generally believe that it is the result of multiple factor resonance, but each has its own emphasis on specific attribution. Founder He Li analyzed from a macro perspective that this round of adjustment is mainly influenced by the resonance of internal and external factors. Specifically, the market still has concerns about economic fundamentals, while the external environment tends to be complex in the short term, coupled with fluctuations in liquidity expectations in December, which collectively led to a high-level adjustment in the market. Xie Xiaoyong, the chairman of Yongjin Investment, is more concerned about financial factors and believes that "further tightening of overseas liquidity" is an important incentive. Since the end of October, the Federal Reserve's attitude has turned hawkish, and the surge in the US dollar index has led to short-term net outflows of foreign capital, putting direct pressure on the overvalued technology sector in A-shares. At the same time, in recent times, the monitoring of subject matter speculation has become stricter, and the activity of both financing and speculative funds has rapidly declined. Short term funds have been forced to reduce leverage, forming a situation of "long selling". From the perspective of fund behavior, Qinchen Asset Management, a billion dollar private equity firm, stated that as the end of the year approaches, defensive actions such as institutional fund cashing and floating profits will naturally lead to short-term market fluctuations. This judgment coincides with the phenomenon observed by Yongjin Investment that the most active funds of the year concentrated their returns in November. Another billion dollar private equity firm, Danshui Spring, starts from a more fundamental market logic and believes that market pricing is shifting from valuation driven to fundamental driven. Unlike the previous round, which was dominated by the domestic economy and domestic demand, the new round of fundamental investment is more reflected in the industrial opportunities brought by the global technology wave, as well as the growth narrative of Chinese enterprises accelerating their overseas expansion and achieving global operations. This style shift itself will bring stage disturbances. It is worth noting that the recent market adjustment occurred against the backdrop of high private equity positions in order to address risks through balanced allocation. According to data from Private Equity Ranking Network, as of November 14th, the private equity positions in stocks reached 81.13%, setting a new high in nearly 112 weeks. Among them, the billion dollar private equity positions reached as high as 87.07%, approaching the high position range of 90%. Li Chunyu, FOF fund manager of Rongzhi Investment under Paipai Network Group, believes that the core driving force behind the increase in private equity positions comes from the improvement of market profitability and positive signals from policy. However, in response to market adjustments while operating at high positions, various private equity firms have demonstrated different coping strategies. In the trading room of a medium-sized private equity firm in Pudong, fund manager Zhang Chen (pseudonym) has been particularly conflicted about his recent operations. His products are heavily held in technology growth and small and medium-sized stocks, and the recent net asset value pullback has put a lot of pressure on him. Every day, I have to make a difficult choice between holding on and adjusting positions, "he admitted." Watching the recent 10 point pullback of individual stocks in my portfolio does shake my confidence. "But when he re examined the fundamental data of these companies, he quickly regained his composure." The growth logic of high-quality Chinese enterprises has not changed, and the wave of technological progress has not stopped. Short term market sentiment fluctuations may actually be a good opportunity for medium - to long-term layout. "This cautious and optimistic attitude coincides with the views of Qinchen Asset Management. Qinchen Asset Management stated that the recent short-term adjustment of A-shares does not change the long-term direction of operation, and for high-quality Chinese assets, it may be a new starting point. The institution has recently adopted a strategy of balanced allocation in portfolio management to control drawdown risks. To achieve perfection, more sophisticated risk hedging methods were adopted. He Li revealed, "When the market is at a high level, we will purchase some virtual put options to protect the portfolio from extreme drawdown." Xie Xiaoyong shared the allocation strategy of Yongjin Investment: we have already adjusted our positions in the third quarter, which not only increases the allocation of cyclical products, but also makes a reasonable layout for the technology sector. They chose a balanced configuration, with a layout benefiting from the transformation of the times, a logic of industry and company prosperity growth, and a reasonable valuation. Despite the challenges faced by the short-term market, first tier private equity firms still maintain confidence in the medium - to long-term market and actively seek new layout opportunities in the process of adjustment. Danshui Spring has shown a firm optimistic attitude towards this. The agency believes that the current valuation of A shares and Hong Kong shares has rebounded, but there is no systematic foam. "The capital market will be subject to periodic disturbance, but it is difficult to turn cold systematically". They focus on areas with structural growth potential that can maintain performance visibility without relying on overall economic recovery, and their allocation mainly revolves around two main themes: emerging growth and cyclical areas. In emerging growth areas, Danshui Spring focuses on three directions: AI technology innovation and energy infrastructure, semiconductors, and new consumer trends. Especially in the field of AI, the institution has noticed that the prosperity is extending from computing power construction to power construction, coupled with the wave of re industrialization in Europe and the United States and emerging market industrialization. The prosperity of sub sectors such as energy storage and power equipment is expected to continue to improve. Xie Xiaoyong holds an optimistic attitude towards the future market operation space. He believes that after the adjustment of major broad-based indices, the market risk premium level has fallen back, and valuations are once again attractive. Xie Xiaoyong said that the fundamentals of A-share technology companies have not changed, and there are still many "waiting funds". Last week alone, the net subscription of stock ETFs exceeded 70 billion yuan, indicating that long-term funds are actively entering through this channel. He Li classified this market adjustment as a 'benign adjustment in the long-term upward trend'. He believes that such short-term adjustments can help control the leverage level of market participants, make the market more sustainable, and optimize the trading structure of the market. As market sentiment gradually recovers, first-line private equity firms continue to adjust their positions and exchange stocks. Zhang Chen believes that although the short-term market is not easy to operate, truly competitive companies can always weather the cycle. "We are taking advantage of this correction to carefully identify which are opportunities for wrong killing and which are risks that need to be avoided. This process may be a bit complicated, but it is also a necessary path for the next round of opportunity capture