FEEDER FUND Meaning and
Definition
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A feeder fund, also known as a feeder vehicle or feeder fund structure, is a type of investment fund that pools together money from individual investors and channels it into a larger master fund. The purpose of a feeder fund is to provide smaller investors with access to investments that may otherwise be difficult to access due to high investment minimums or restricted access.
Typically, a feeder fund is established by an asset management firm to act as an intermediary between individual investors and the master fund. The feeder fund collects the investments from individual investors and then invests the pooled capital into the master fund. By doing so, investors indirectly gain exposure to the investment strategy, assets, and returns of the master fund.
Feeder funds are commonly used in the context of hedge funds, private equity funds, and other alternative investment vehicles. They allow individual investors to benefit from the specialized expertise and potentially higher returns offered by these types of funds, without having to meet the minimum investment requirements typically associated with them.
It is important to note that a feeder fund does not have its own investment strategy independent from the master fund. Instead, its purpose is solely to aggregate investments and allocate them to the master fund. Feeder funds usually charge management fees, which cover the costs of administration and the services provided to investors.
Common Misspellings for FEEDER FUND
- deeder fund
- ceeder fund
- veeder fund
- geeder fund
- teeder fund
- reeder fund
- fweder fund
- fseder fund
- fdeder fund
- freder fund
- f4eder fund
- f3eder fund
- fewder fund
- fesder fund
- fedder fund
- ferder fund
- fe4der fund
- fe3der fund
- feeser fund
- feexer fund
Etymology of FEEDER FUND
The word "feeder fund" is derived from the combination of the terms "feeder" and "fund".
The term "feeder" comes from the verb "to feed", which originates from the Old English word "fedan", meaning "to give food to". In a financial context, "feeder" often describes something that supplies or channels resources into another entity.
On the other hand, a "fund" refers to a pool of money or capital raised from investors with a particular investment objective. It is derived from the Latin word "funds", meaning "a sum of money".
When these terms are combined, a "feeder fund" refers to a specific type of investment fund. It is a fund that channels or "feeds" money from investors into a larger, master fund.
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