{"id":3293,"date":"2026-04-26T08:37:12","date_gmt":"2026-04-25T23:37:12","guid":{"rendered":"https:\/\/slowsteps.com\/?p=3293"},"modified":"2026-04-26T08:37:12","modified_gmt":"2026-04-25T23:37:12","slug":"fund-structure-unittrust-vs-partnership","status":"publish","type":"post","link":"https:\/\/slowsteps.com\/en\/en-articles\/fund-structure-unittrust-vs-partnership\/","title":{"rendered":"Episode 4: Why Japan Loves Unit Trusts (again) \u2014 and When Partnerships Work Better"},"content":{"rendered":"\n<div class=\"wp-block-bogo-language-switcher\"><ul class=\"bogo-language-switcher list-view\"><li class=\"en-US en current first\"><span class=\"bogoflags bogoflags-us\"><\/span> <span class=\"bogo-language-name\"><a rel=\"alternate\" hreflang=\"en-US\" href=\"https:\/\/slowsteps.com\/en\/wp-json\/wp\/v2\/posts\/3293\/\" title=\"English\" class=\"current\" aria-current=\"page\">English<\/a><\/span><\/li>\n<li class=\"ja last\"><span class=\"bogoflags bogoflags-jp\"><\/span> <span class=\"bogo-language-name\"><a rel=\"alternate\" hreflang=\"ja\" href=\"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3293\/\" title=\"Japanese\">\u65e5\u672c\u8a9e<\/a><\/span><\/li>\n<\/ul><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><em><em><em>This article is based on a Podcast contents of a same title:<\/em><\/em><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In Japan\u2019s investment landscape, one recurring question is how to choose between a unit trust (contractual fund) and a partnership-type vehicle.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although they may appear similar, these two structures are fundamentally different. Their differences arise from history, liquidity, tax treatment, and the nature of the underlying assets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Episode 4 explores the origins of Japan\u2019s unit trust culture and clarifies why partnership structures are used for certain types of investments. This article summarizes the key points for practitioners and international readers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><br>When Unit Trusts Work Best<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=1024%2C576&#038;ssl=1\" alt=\"\u6295\u8cc7\u4fe1\u8a17\uff08\u5951\u7d04\u578b\uff09\u306e\u7279\u5fb4\u3092\u793a\u3059\u56f3\u3002\u6b74\u53f2\u3001\u6d41\u52d5\u6027\u3001\u7a0e\u5236\u306e\u9805\u76ee\u304c\u305d\u308c\u305e\u308c\u5217\u6319\u3055\u308c\u3066\u3044\u308b\u3002\" class=\"wp-image-3284\" srcset=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=1024%2C576&amp;ssl=1 1024w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=300%2C169&amp;ssl=1 300w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=768%2C432&amp;ssl=1 768w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=1536%2C864&amp;ssl=1 1536w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=2048%2C1152&amp;ssl=1 2048w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=1200%2C675&amp;ssl=1 1200w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?resize=1320%2C743&amp;ssl=1 1320w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme1.png?w=3000&amp;ssl=1 3000w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">1. Historical Background<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Emerged during Japan\u2019s postwar capital market development<\/li>\n\n\n\n<li>Designed to provide retail investors with access to diversified portfolios<\/li>\n\n\n\n<li>Securities firms packaged listed equities to make them easier to distribute<\/li>\n\n\n\n<li>Became widely adopted as a standardized product for listed stocks and bonds<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">2. Liquidity (T+2 \/ T+3 Settlement)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Same settlement cycle as listed equities<\/li>\n\n\n\n<li>Supports daily subscriptions and redemptions<\/li>\n\n\n\n<li>Public funds may hold only limited unlisted assets (up to 15%)<\/li>\n\n\n\n<li>Enables large-scale, systematic product manufacturing<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">3. Tax Treatment (Deferral Effect)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No taxation on trades inside the trust<\/li>\n\n\n\n<li>Avoids double taxation on dividends<\/li>\n\n\n\n<li>Capital gains taxation is deferred<\/li>\n\n\n\n<li>Well-suited for long-term savings and retail investors<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><br>When Partnerships Work Best<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=1024%2C576&#038;ssl=1\" alt=\"\u7d44\u5408\u578b\u6295\u8cc7\u306e\u7279\u5fb4\u3092\u89e3\u8aac\u3057\u305f\u56f3\u3002\u6295\u8cc7\u5bfe\u8c61\u3001\u8cc7\u91d1\u306e\u6d41\u308c\u3001\u7a0e\u52d9\u306b\u95a2\u3059\u308b\u60c5\u5831\u30923\u3064\u306e\u30ab\u30e9\u30e0\u3067\u793a\u3057\u3066\u3044\u308b\u3002\" class=\"wp-image-3286\" srcset=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=1024%2C576&amp;ssl=1 1024w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=300%2C169&amp;ssl=1 300w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=768%2C432&amp;ssl=1 768w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=1536%2C864&amp;ssl=1 1536w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=2048%2C1152&amp;ssl=1 2048w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=1200%2C675&amp;ssl=1 1200w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?resize=1320%2C743&amp;ssl=1 1320w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme2.png?w=3000&amp;ssl=1 3000w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">1. Investment Targets (Project-Based Assets)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Unlisted equities<\/li>\n\n\n\n<li>Real estate<\/li>\n\n\n\n<li>Private lending<\/li>\n\n\n\n<li>Assets that cannot be bought or sold immediately<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">2. Capital Calls (Flexible Funding)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Capital is drawn only when needed<\/li>\n\n\n\n<li>Allows \u201cplease pay within 10 days\u201d\u2013type flexibility<\/li>\n\n\n\n<li>Funding aligns with investment opportunities<\/li>\n\n\n\n<li>Ideal for project-based or private market investments<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">3. Tax Treatment (No Deferral)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No tax deferral mechanism like unit trusts<\/li>\n\n\n\n<li>Capital gains are taxed in the year they occur<\/li>\n\n\n\n<li>Reinvestment is restricted by fund duration<\/li>\n\n\n\n<li>Fewer taxable events due to limited transaction frequency<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><br>Unit Trusts vs Partnerships \u2014 How to Choose<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=1024%2C576&#038;ssl=1\" alt=\"\u6295\u8cc7\u4fe1\u8a17\u3068\u7d44\u5408\u306e\u4f7f\u3044\u5206\u3051\u30de\u30c3\u30d7\u3002\u89b3\u70b9\u5225\u306b\u6295\u8cc7\u5bfe\u8c61\u3001\u6d41\u52d5\u6027\u3001\u8cc7\u91d1\u306e\u6d41\u308c\u3001\u7a0e\u52b9\u679c\u3001\u6b74\u53f2\u30fb\u6587\u5316\u3001\u6295\u8cc7\u5bb6\u304c\u6bd4\u8f03\u3055\u308c\u3066\u3044\u308b\u3002\" class=\"wp-image-3288\" srcset=\"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=1024%2C576&amp;ssl=1 1024w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=300%2C169&amp;ssl=1 300w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=768%2C432&amp;ssl=1 768w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=1536%2C864&amp;ssl=1 1536w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=2048%2C1152&amp;ssl=1 2048w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=1200%2C675&amp;ssl=1 1200w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?resize=1320%2C743&amp;ssl=1 1320w, https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?w=3000&amp;ssl=1 3000w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Key Decision Axes<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Investment Target<\/strong>: Listed assets \u2192 unit trust; private assets \u2192 partnership<\/li>\n\n\n\n<li><strong>Liquidity Needs<\/strong>: Daily liquidity \u2192 unit trust<\/li>\n\n\n\n<li><strong>Funding Method<\/strong>: Project-based \u2192 partnership<\/li>\n\n\n\n<li><strong>Tax Considerations<\/strong>: Deferral needed \u2192 unit trust<\/li>\n\n\n\n<li><strong>Market Culture:<\/strong> Unit trusts dominate Japan\u2019s retail market<\/li>\n\n\n\n<li><strong>Investor Base<\/strong>: Retail to professional \u2192 unit trust; institutional \u2192 partnership<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The nature of the underlying assets determines the right vehicle.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>History, tax, and liquidity shape that choice.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><br>About This Episode<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Episode 4 provides a structured overview of why Japan\u2019s investment market relies heavily on unit trusts, and how partnership structures fill the gaps for private market investments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For international readers, this offers a clear explanation of Japan\u2019s unique investment culture.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Links<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>YouTube\uff08Audio\uff09<\/strong> \u2192 <a href=\"hhttps:\/\/youtu.be\/1QtQU_aCEDw\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/youtu.be\/1QtQU_aCEDw<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Spotify\uff08Audio\uff09<\/strong> \u2192 <a href=\"https:\/\/open.spotify.com\/episode\/7Canihb580HDKplMmL9v9Z?si=fqcgTiSSTYuaScbPmdxmVw\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/open.spotify.com\/episode\/7Canihb580HDKplMmL9v9Z?si=fqcgTiSSTYuaScbPmdxmVw<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\">\u95a2\u9023\u8a18\u4e8b<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Episode 1: <a href=\"https:\/\/slowsteps.com\/en\/podcast\/episode-1-en\/\" data-type=\"post\" data-id=\"3025\" target=\"_blank\" rel=\"noreferrer noopener\">What is a fund<\/a><\/li>\n\n\n\n<li>Episode 2: <a href=\"https:\/\/slowsteps.com\/en\/podcast\/episode-2-en\/\" data-type=\"post\" data-id=\"3095\" target=\"_blank\" rel=\"noreferrer noopener\">The relationship between investors and managers<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/slowsteps.com\/en\/podcast\/three-vessels-of-fund-structures\/\" data-type=\"post\" data-id=\"3182\">Episode 3: Comparing the three vessels of fund structures<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/slowsteps.com\/en\/en-articles\/why-japanese-loves-unit-trust\/\" data-type=\"post\" data-id=\"1975\">Why Japanese \u2013 this is how Japanese investors loves unit trusts<\/a><\/li>\n\n\n\n<li>Fund Structures <a href=\"https:\/\/slowsteps.com\/en\/category\/fund-structuring\/\" data-type=\"category\" data-id=\"775587849\" target=\"_blank\" rel=\"noreferrer noopener\">category archive<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>A clear comparison of Japan\u2019s unit trusts and partnership structures. This article explains how history, liquidity, tax treatment, and investment targets shape the choice of vehicle for practitioners and international readers.<\/p>\n","protected":false},"author":94403148,"featured_media":3288,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"A clear comparison of Japan\u2019s unit trusts and partnership structures. This article explains how history, liquidity, tax treatment, and investment targets shape the choice of vehicle for practitioners and international readers.","jetpack_seo_html_title":"Unit Trusts vs Partnerships\uff5cA Practical Guide to Japan\u2019s Investment Vehicles","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_locale":"en_US","_original_post":"https:\/\/slowsteps.com\/?p=3282","_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"I assume this is the first time to confess here on LInkedIn that I am a podcaster ;-). You can find me on your favourite Podcast platforms like Apple, Spotify and YouTube.\n\nYou may wonder why you are often requested to set up a unit trust to access to Japanese investors for hedge funds, or you are invested from a unit trust behind for your partnership funds.\n\nIn this episode, I spoke about a clear comparison of Japan\u2019s unit trusts and partnership structures. This article is a summary of the episode to explain how history, liquidity, tax treatment, and investment targets shape the choice of vehicle for practitioners and international readers.\n\nHope you like this for your weekend reading.","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":true,"token":"eyJpbWciOiJodHRwczpcL1wvc2xvd3N0ZXBzLmNvbVwvd3AtY29udGVudFwvdXBsb2Fkc1wvMjAyNlwvMDRcL3NjaGVtZTMtMTAyNHg1NzYucG5nIiwidHh0IjoiRXBpc29kZSA0OiBXaHkgSmFwYW4gTG92ZXMgVW5pdCBUcnVzdHMgKGFnYWluKSBcdTIwMTQgYW5kIFdoZW4gUGFydG5lcnNoaXBzIFdvcmsgQmV0dGVyIiwidGVtcGxhdGUiOiJoaWdod2F5IiwiZm9udCI6IiIsImJsb2dfaWQiOjIzODQ0ODA1NH0.iO71wkhmw5TybcPx2vQZJ5snG5kO8MjPFK_kBw-MPDoMQ"},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[59749886,775587852,775587849,775587843],"tags":[29949403,775587908,775587906,775587891,4258331,29172,775587907,233748,202],"class_list":["post-3293","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-en-articles","category-foundations","category-fund-structuring","category-podcast","tag-fund-structure","tag-japan-investment-culture","tag-liquidity","tag-partnership-structure","tag-private-debt","tag-private-equity","tag-tax-deferral","tag-unit-trust","tag-venture-capital","en-US"],"jetpack_publicize_connections":[],"jetpack_likes_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pg8vem-R7","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/slowsteps.com\/wp-content\/uploads\/2026\/04\/scheme3.png?fit=5760%2C3240&ssl=1","_links":{"self":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/users\/94403148"}],"replies":[{"embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/comments?post=3293"}],"version-history":[{"count":7,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3293\/revisions"}],"predecessor-version":[{"id":3303,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/posts\/3293\/revisions\/3303"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/media\/3288"}],"wp:attachment":[{"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/media?parent=3293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/categories?post=3293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/slowsteps.com\/wp-json\/wp\/v2\/tags?post=3293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}