Asset Class
Feeder Fund
A Feeder Fund pools investor capital into a master fund, simplifying access, administration, and eligibility constraints for specific LP types. Allocators evaluate feeders through fee layering, reporting clarity, liquidity alignment, and governance rights.
Feeder funds are commonly used to provide access to a master strategy while accommodating different investor types, jurisdictions, and onboarding constraints.
From an allocator perspective, feeders must be underwritten as part of the full economic stack: who charges what, what rights the LP has, and whether liquidity and reporting are clean.
How allocators define feeder quality
They assess:
- Fee layering: admin fees, platform fees, additional carry
- Governance: voting, information rights, side letter treatment
- Liquidity: feeder terms vs master liquidity
- Tax/regulatory fit: eligibility and compliance constraints
- Reporting: transparency, capital account accuracy, timelines
Allocator framing:
“Does the feeder add access value—or just add fees and complexity?”
What slows decisions
- Fee opacity and layered economics
- Liquidity mismatch vs master fund
- Weak information rights and reporting commitments
- Complex tax/regulatory uncertainty
Key Takeaways
- Feeders are access tools; economics and rights must be explicit
- Fee layering can erase value quickly
- Liquidity and reporting alignment drive institutional comfort