Feeder fund
Also called Feeder, Master-feeder, Feeder vehicle.
A feeder fund is a separate vehicle that raises capital from a particular group of investors and invests all of it in a main fund, the master fund, so that investors with different tax, regulatory or minimum-commitment needs can access the same portfolio through an entity suited to them. The feeder is one limited partner of record in the master.
Example
Fund I is a Delaware limited partnership targeting $50M. Non-US and US tax-exempt investors prefer to invest through an entity outside the US, so the manager forms a Cayman feeder that takes $15M from them and commits $15M to Fund I. A second feeder aggregates forty individuals at $250,000 each into a single $10M commitment, so the master has one LP of record instead of forty. When the master calls 10%, it calls $1.5M from the Cayman feeder and $1M from the aggregator, and each feeder calls its own investors in turn. The feeders' unfunded commitments are their share of the master's.
Confused with
Fund of funds. A fund of funds invests in many funds, has its own strategy and charges its own fee and carry. A feeder invests in one fund and usually charges nothing extra.
SPV. An SPV holds an investment in a company. A feeder holds an interest in a fund.
Parallel fund. A parallel fund invests side by side with the main fund, deal by deal, rather than through it.
In practice
Each feeder is a fund in its own right: its own subscription documents, KYC, capital accounts, statements and tax reporting, plus FATCA and CRS self-certifications where it is offshore. Investors in a feeder may be counted through to the master for its exemption, which counsel checks at formation. Call notices need a buffer between the feeder's due date and the master's, or the feeder is funding the gap.