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What is a Feeder Fund?
A feeder fund is an investment fund that does the majority of its investment through another fund, also known as the master fund. It is what we call a master-feeder relationship.
The feeder fund is the initial point of capital investment where capital flows from investors to feeders, and the feeders in turn invest all or a portion of that capital into the master fund. The master fund then uses the capital to invest in securities on behalf of the feeder fund. The feeder fund will obtain profits from the master fund in proportion to the amount invested in the master fund.
A feeder fund is an investment fund that does the majority of its investment through another fund, also known as the master fund. It is what we call a master-feeder relationship.
The feeder fund is the initial point of capital investment where capital flows from investors to feeders, and the feeders in turn invest all or a portion of that capital into the master fund. The master fund then uses the capital to invest in securities on behalf of the feeder fund. The feeder fund will obtain profits from the master fund in proportion to the amount invested in the master fund.