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A feeder fund is an investment fund that pools capital from investors and channels it into a master fund, which manages the combined capital according to a unified investment strategy. It allows investors to gain exposure to larger, professionally managed portfolios.
An international feeder fund collects money from investors in various countries and invests it into a master hedge fund that manages all the assets, optimizing returns across global markets.
• Allows smaller investors access to large, professionally managed funds.
• Offers a diversified investment strategy through pooled resources.
• Operates under the umbrella of a master fund.
It provides access to diverse investment opportunities through pooled resources, enhancing risk-adjusted returns.
Risks include dependence on the master fund's performance; benefits include professional management and diversification.
Understanding feeder funds helps assess underlying risks and the management quality of pooled investments.
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