Fund Expenses: Differentiating Approaches To Expenses For Japan PE/VC Funds

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Executive Summary

• What’s new: Japan’s Ministry of Economy, Trade and Industry revised the Japan model limited partnership agreement in June 2025, expanding the fund expenses provision considerably to be more aligned with the global standard, including items such as broken-deal and abort costs and subscription line facility costs.
• Why it matters: As global capital continues to flow into Japan PE and VC markets, Japan GPs face a growing need to adopt policies and procedures around how they allocate fund expenses. Underdeveloped expense governance can leave them exposed to LP questions, reputational damage and even potential regulatory violations.
• What to do next: Japan GPs should recognize that expense allocation is an increasingly critical governance issue with real legal and commercial consequences, and should build institutional knowledge and good practice accordingly.