The Great Bridge: How the Cayman Islands Connects Japan to Global Private Markets

Japan is undergoing a historic shift from savings to investment, unlocking the world’s largest pool of untapped household capital and driving record growth in asset management. Cayman Islands funds have become the essential bridge, connecting Japanese investors to global private markets.

Japan’s investment market is changing at an unprecedented pace. With over US$7 trillion still held in household cash and the world’s fastest AUM growth in 2023 (+18%), investors—from megabanks and life insurers to high-net-worth and mass-affluent households—are moving from savings into assets. Japan is now the second-largest source of Cayman Islands fund investments globally, underscoring the Cayman Islands’ central role in channelling Japanese capital to world markets.

What is less visible is the infrastructure that gets this capital to leading private market managers. Cayman Islands funds, and in particular Cayman Islands Unit Trusts, have become the key bridge connecting Japanese investors to global private equity, credit, infrastructure, and real estate opportunities.

Why the Cayman Islands? The Trusted Gateway for Japanese Capital

Japan’s link with the Cayman Islands goes back more than 30 years. In the 1990s, distributors and trust banks needed a vehicle that fit domestic investment trust principles but worked for global funds. The Cayman Islands Unit Trusts delivered both. Familiarity, consistent regulation, common-law governance, and a mature service ecosystem made the Cayman Islands the default offshore jurisdiction.

Today, Cayman Islands Unit Trusts represent about 70% of all foreign investment trust registrations in Japan.

The model works for both sides: For Japanese investors, Cayman Islands Unit Trusts offer clear legal rights, tax efficiency, trusted oversight, and familiar operational procedures consistent with local practices.

For global managers, flexible structures that scale across investor segments and provide access to a stable, growing capital base.

A National Shift: From Institutions to Individuals

Institutions moved first. Life insurers and megabanks, including Japan Post Bank, began building alternative allocations over a decade ago, with JPB’s private equity exposure growing quickly. Regional banks have followed, seeking yield and diversification after years of low rates. New Economic Value-Based Solvency (ESR) rules from 2025 are also steering insurers toward capital-efficient, diversified, long-duration assets—especially private credit.

Now, households are joining in. The revamped Nippon Individual Savings Account (“NISA”), demographic shifts, and the return of inflation are drawing more retail investors into professionally managed funds. Semi-liquid funds are opening access to strategies once reserved for institutions, giving individuals new ways to diversify and grow their wealth.

Meeting the Needs of Modern Japanese Investors

Cayman Islands structures have evolved with the market. For institutions, the Private Equity-Type Unit Trust has become the preferred structure for Japanese pensions, megabanks, and insurers investing in private markets. This structure enabled institutions like Japan Post Bank to grow their private equity portfolios from near zero to over US$50 billion in less than a decade, making it one of the largest top 10 private equity investors globally.

For high-net-worth and retail investors, Cayman Islands Unit Trusts have opened the door to global private markets through evergreen and semi-liquid formats. These funds offer periodic redemptions and lower minimums, making them accessible to a broader range of investors. Trusted domestic distributors and familiar trust-bank frameworks have further supported rapid adoption. Many of the world’s leading managers—including Blackstone, KKR, Apollo, EQT, and Goldman Sachs—now use Cayman Islands Unit Trusts feeders for their flagship Japanese offerings, such as Blackstone’s BREIT, BCRED, BXPE, BXINFRA, and KKR’s Private Markets Equity Fund. This approach has opened the door for Japanese investors to participate in leading global funds.

Cayman Islands Unit Trusts work as stand-alone funds or as feeders into Irish, Luxembourg, or US master funds, aligning with Japanese preferences and global standards. As Japanese investors increasingly allocate to EU-denominated assets, Cayman Islands Unit Trusts provide seamless cross-border access and compliance with global standards. Investors are no longer focused on ‘offshore funds’ alone; instead, they want seamless access to global portfolios—and the Cayman Islands’ flexibility and compatibility make it the jurisdiction of choice.

Looking Ahead: A Bridge for a Generational Shift

Japan aims to double household investment income by 2027, pointing to continued growth in private market allocations and potentially more than US$100 billion in annual international flows within a few years. A proposed ‘Silver NISA’, which would permit regularly distributing funds to be eligible for inclusion in the NISA, could resonate with investors over 65, who hold about 60% of household wealth.

The Cayman Islands Unit Trusts will keep evolving with these trends, offering the familiarity Japanese investors expect and the flexibility global sponsors need. For both investors and managers, the Cayman Islands’ proven platform means greater access, diversification, and opportunity.

For over 30 years, the Cayman Islands has given Japan a stable, transparent, and adaptable gateway to world markets. As Japan’s savings-to-investment shift accelerates, that bridge is set to carry a larger share of global fund flows than ever before. Now is the time for both Japanese allocators and international sponsors to leverage this bridge for the next era of growth.

About the Maples Group’s Japanese Funds Practice

The Maples Group’s Japanese Funds practice advises and provides funds and fiduciary services to the industry’s heavyweights, as well as new entrants to the market, on the structuring and establishment of Cayman Islands, Luxembourg, Irish and Jersey funds targeted at Japanese investors.