Investment structure for tax-exempt and tax deferred investors

摘要

An investment structure allows U.S. federal income tax-exempt and tax deferred investors to invest in a registered investment company that is taxed as a partnership without incurring the negative tax consequences to such investors of investing in a partnership that would otherwise generate, as to such investors, unrelated business taxable income, which is income on which otherwise tax-exempt or tax-deferred investors are required to pay tax. The investment structure is configured as a three-tier master-feeder arrangement which includes a top-tier fund, which is a registered closed-end investment company formed as a limited liability company or limited partnership and taxed as a partnership; an offshore fund which is an unregistered investment company organized in an offshore jurisdiction as a limited duration company or other corporate entity; and a master fund, which is a registered closed-end investment company formed as a limited liability company or limited partnership and taxed as a partnership.