The master-feeder structure allows asset managers to capture the efficiencies of larger pools of assets (see economics of scale) although fashioning investment funds to separate market niches.
One or more investment vehicles pool their portfolio within another vehicle – i.e. there are several smaller feeder funds and one master to which they contribute.
Sometimes, especially when the feeders are hedge funds, this is a way of complying with the distinct legal systems of distinct jurisdictions. In other words, there will be an onshore feeder and an offshore feeder to the same master portfolio.
This is also sometimes called the hub and spoke structure.
Read more about Master-feeder: Tax Concerns