Definition
Feeder Fund
An offshore vehicle that pools international LPs into a master SPV.
A feeder fund is a separate legal entity — usually formed in an offshore jurisdiction like the Cayman Islands or BVI — that pools capital from non-US LPs and then invests that capital into a master SPV alongside US LPs. Feeders address tax considerations for non-US investors (avoiding unrelated business taxable income or US tax filings) and let sponsors keep a single underlying investment vehicle. They add cost and complexity, so most sponsors use them only when international LP capital is material to the deal.