Feeder Fund
A fund that collects capital from a specific investor group and channels it into a master fund, typically to accommodate different tax, regulatory, or reporting needs.
Common feeder structures include onshore/offshore feeders for US taxable vs. tax-exempt or non-US investors, ERISA-compliant feeders, and feeders for specific LP types such as sovereign wealth funds or foundations. The master-feeder structure allows a single portfolio management team to serve diverse investor bases efficiently.
Frequently Asked Questions
What is a feeder fund?
A feeder fund collects capital from a specific group of investors and channels it into a master fund — accommodating different tax, regulatory, or reporting needs while maintaining unified portfolio management.
Why are feeder funds necessary?
Different investor types have different tax and regulatory requirements. Feeder funds allow onshore/offshore investors, tax-exempt entities, and specific LP types to invest in the same strategy through appropriate legal structures.
What is a master-feeder structure?
A master-feeder structure uses one master fund for portfolio management with multiple feeder funds collecting capital from different investor categories — enabling efficient management while accommodating diverse investor needs.
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