What does a Feeder Fund primarily mandate regarding investment in a single scheme?

A Feeder Fund is designed to channel investments into a master fund, which is typically a broader investment scheme. This structure allows the Feeder Fund to pool resources from multiple investors and concentrate them into a single investment vehicle. The primary mandate for a Feeder Fund regarding investment in a single scheme is to ensure that it invests less than 90% of its assets into that scheme.

This lower threshold is crucial as it allows the Feeder Fund to maintain flexibility in its investment strategy. By not being fully committed to a single scheme, the Feeder Fund can also invest in other opportunities, diversify its portfolio, and manage risk effectively. This flexibility makes it an attractive option for investors looking for diversified exposure while still participating in a collective investment scheme.

The choices indicating a full investment or a specific percentage at 90% would limit the Feeder Fund’s ability to diversify, making less sense for a fund structured to offer strategic asset allocation across various investments. The lack of investment restrictions could imply a broader or less focused strategy and does not align with the typical operational framework of a Feeder Fund. Thus, investing less than 90% aligns with its primary objectives of diversification and strategic investment management.