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Levered feeder funds: Structural and security considerations in fund finance

United Kingdom, England, London . The City, business men near the Lloyds Building (Richard Rogers architect), on the background the Swiss Re Tower (Norman Foster architect), known as The Gherkin
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The overlap of levered feeder funds requires careful management of security, capital calls, and cash control, especially when a feeder’s commitment backs the master fund’s borrowing base.

Master fund-feeder fund structures are increasingly being combined with financing arrangements at both the feeder fund and master fund levels. While this provides useful liquidity for investors and flexibility for managers, it closely links two otherwise separate credit facilities.

In practice, both lenders may ultimately rely on the same underlying

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