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The option of master-feeder structures was introduced in Europe with implementation of the UCITS IV Directive. Such structures comprise a master fund, which invests in securities, money-market instruments, investment funds, sight deposits or callable deposits and/or derivative instruments, as specified in the master fund’s investment strategy. There may be one or several feeder funds to the master fund. The feeder funds invest at least 85% of their fund assets in the master fund. Apart from investing in the master fund, feeder funds may only invest in sight deposits and callable deposits, as well as derivatives for hedging purposes.

This solution makes sense where:

  • smaller funds with identical investment strategies are combined into one fund and the original fund names are to be kept;
  • a fund is to be made available to clients in various countries and/or with various home currencies while avoiding the full replication of the fund in each country.

By using master-feeder structures the investment company can meet different client requirements more effectively. The securities portfolio of a master fund, which is bigger when compared with several smaller investment funds, can be managed more effectively and more cost-efficiently.

The chart exemplifies the master-feeder structure on the basis of the ESPA BOND EMERGING MARKETS CORPORATE IG* fund. It illustrates two forms of possible feeders.

masterfeeders

*Important legal notice

The following is advertising information. Data source (unless otherwise stated): ERSTE-SPARINVEST Kapitalanlagegesellschaft m.b.H. Our languages of communication are German and English. The prospectus for UCITS funds (including any updates) is prepared in accordance with the provisions of the 2011 Investment Fund Act (InvFG 2011) as amended and published in the official gazette “Amtsblatt zur Wiener Zeitung”. For any alternative investment funds (AIFs) managed by ERSTE-SPARINVEST Kapitalanlagegesellschaft m.b.H. “Information for investors pursuant to Article 21 AIFMG” is prepared in accordance with the provisions of the Alternative Investment Fund Managers Act (AIFMG) in conjunction with the InvFG 2011. The current versions of the prospectus, the “Information for investors pursuant to Article 21 AIFMG” and the Key Investor Information Document (KIID) can be downloaded from the website www.erste-am.com and are available free of charge to any prospective investor at the head offices of the management company and the custodian bank. The exact date of the most recent publication of the prospectus, the languages in which the KIID is available, as well as any further places where these documents may be obtained can be found on www.erste-am.com. This document serves as additional information for our investors and is based on what was known to the authors at the time of preparation. Our analyses and conclusions are of a general nature and do not take account of our investors’ individual requirements with respect to income, tax situation or risk appetite. Past performance does not allow any reliable conclusions regarding the future development of a fund.

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