Master-Feeder Structure in Australia: 2025 Guide for Global Investors

For global investors eyeing Australia’s robust asset management scene, the master-feeder structure has become an essential part of the toolkit. With Australia’s funds under management reaching new highs in 2025 and regulatory tweaks making cross-border flows smoother, understanding this structure is more crucial than ever. But what exactly is a master-feeder structure, and why is it so significant in the modern financial landscape?

What is a Master-Feeder Structure?

A master-feeder structure is a fund arrangement that allows investors from different jurisdictions to pool their money into a single investment vehicle (the “master” fund) via separate “feeder” funds. Each feeder can be tailored to a specific investor base or regulatory regime—think Australian, US, and European investors all accessing the same underlying assets, but through different wrappers.

Key features include:

• Global pooling: Investors from around the world combine capital in one master fund, benefiting from economies of scale.

• Customised feeders: Each feeder can be structured to meet local tax, regulatory, and investor needs.

• Centralised management: Investment strategies are executed at the master fund level, reducing duplication and operational drag.

This structure is particularly popular among hedge funds, private equity, and real estate funds seeking international capital.

Why Australia is Embracing the Master-Feeder Model in 2025

Several factors have propelled the master-feeder model into the Australian spotlight in 2025:

• Regulatory updates: The Australian Securities and Investments Commission (ASIC) rolled out new guidance in early 2025, clarifying cross-border fund distribution and streamlining the registration process for offshore feeder funds.

• Attractive tax regime: Australia’s Managed Investment Trust (MIT) regime remains competitive, and recent tweaks have simplified tax reporting for foreign investors using feeder structures.

• Asia-Pacific fund passporting: The Asia Region Funds Passport (ARFP) continues to gain traction, making it easier for regional investors to access Australian master funds through local feeders.

For example, a US-based feeder fund can now more easily invest in an Australian master fund thanks to clearer withholding tax guidance and streamlined FATCA/CRS compliance measures introduced in the 2025 budget.

Real-World Applications: Global Investors Tap Aussie Expertise

Consider a leading global asset manager launching a new infrastructure fund in Sydney. They set up:

• An Australian feeder for local superannuation funds and wholesale investors.

• A Singaporean feeder for regional clients leveraging the ARFP.

• A Cayman Islands feeder for US and European investors, optimised for tax neutrality.

All three feeders invest in the same master fund domiciled in Australia, ensuring efficient deployment of capital and unified portfolio management. This structure also allows each investor group to comply with their local rules—such as Australia’s RG 97 fee disclosure for locals and FATCA for US participants—without complicating the master fund’s operations.

In 2025, we’re also seeing smaller Australian managers partner with offshore platforms to launch feeder funds, expanding their reach into the UK and EU as post-Brexit regulatory clarity emerges.

Risks, Challenges, and the Road Ahead

While master-feeder structures offer flexibility and scale, they’re not without complexity. Managers must carefully navigate:

• Regulatory compliance: Each feeder must adhere to its local regulations, from ASIC’s licensing requirements to GDPR for European feeders.

• Tax treatment: Cross-border tax rules can be intricate—recent ATO guidance in 2025 highlights the importance of robust transfer pricing and anti-avoidance measures.

• Operational risk: Coordinating subscriptions, redemptions, and reporting across multiple feeders demands strong fund administration and legal expertise.

However, the benefits often outweigh the hurdles for sophisticated managers and investors seeking global exposure with tailored solutions. As Australia continues to position itself as a regional funds hub, expect master-feeder structures to become even more prevalent—especially as digital onboarding and regtech tools streamline compliance in 2025 and beyond.