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Introducing New Master-Feeder Investment Strategy

Posted by: In: Newsletter 07 Oct 2014 Comments: 0

By Jim Hynes, Managing Director

The recent increase in Rockspring’s international capital has spurred us to explore a more strategic, flexible and cost-effective option for our newest Texas land investment partners spanning across the U.S., Canada, Europe and other markets. As a result, we’ve established a new master-feeder strategy.

Popular within the oil and gas industry, a master-feeder structure allows a high degree of flexibility and is ultimately designed to facilitate and maximize the operating efficiencies, thereby reducing costs for land investment partners in a manner that transcends regulatory barriers.

The structure generally involves the use of a master fund (see diagram below) into which separate and distinct “hub” or feeder funds invest. U.S. taxable investors take advantage of investing in a U.S. limited partnership feeder fund, which through certain elections made at the time the structure is established, is tax effective for such taxable investors. Non-U.S. and U.S. tax-exempt investors subscribe via separate feeder funds to avoid coming directly within the U.S. tax regulatory net.

New Master Fund Investment Strategy

Image from Pennyitworks.com

This newest option is just another way we continue to provide value to our trusted partners, and we look forward to the success this new strategy will bring them.

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