Fund vehicle that channels investor capital into a master fund, usually as part of a master-feeder structure used in private and hedge fund setups.
A feeder fund is a fund vehicle that pools investor money and sends most or all of it into a master fund that actually holds and trades the portfolio.
This structure is common in private fund and hedge fund setups where different investor groups need separate legal wrappers but the manager wants one central trading pool.
In a feeder structure:
That arrangement lets a manager separate investor types while keeping trading and portfolio management centralized.
Feeder funds are often used to handle tax, jurisdiction, or investor-eligibility differences. One feeder may serve U.S. taxable investors while another feeder serves offshore or tax-exempt investors, even though both ultimately access the same master portfolio.
A feeder fund usually points to one master fund. A fund of funds usually allocates across multiple underlying funds. The difference matters because the diversification profile and fee stack can be very different.