Feeder Fund
Categories: Managed Funds
The collection you take up at Denny's when you can't afford to order pie.
Also, it's a common structure in the hedge fund industry.
You have $2 million lying around that you want to invest. You give it to a feeder fund. But that fund doesn't research investments and find the best place to put your money, Instead, that fund routes your money into a larger fund, called the master fund.
The master fund is a big pile of money where a fund manager really does research investments to find the best place to put your money (along with the money of all the other people who wrote checks to various other feeder funds).
So the feeder fund isn't an investment fund in itself. It's a conduit into another fund. It feeds your funds to a different fund, hence the name.
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