Business Continuity and Succession

What happens to a Legion vehicle, its records, and its investors if Legion is disrupted.

We are building Legion to last, and we have no plans to go anywhere. We are committed to every vehicle on the platform for its full life cycle, from first close to final distribution. But we also know how it feels to be on the other side of the table. When you work with a young company, you want more than good intentions. You want to know that your vehicle, your records, and your investors would carry on without you having to move funds, re-paper documents, or rebuild anything.

Fund managers evaluating any platform should ask a blunt question: what happens to my vehicle if this company goes away? The short version is that the parts that matter to a fund lead do not depend on Legion continuing to exist.

The three roles Legion plays, and what happens to each

For a given deal, Legion wears three hats: the exempt reporting adviser (ERA), the general partner (GP), and the operational layer that abstracts fund administration. None of the three is a single point of failure.

1. Administration continues. Legion does not perform fund administration itself. It outsources to Formidium (Seamless), an independent fund administrator, and abstracts the operational burden for the fund lead. The books, capital accounts, and investor statements sit with Formidium, billed on an ongoing basis and paid from the vehicle. If Legion winds down, the outsourced administration simply continues, and nothing was prepaid to Legion to be lost.
2. The GP entity is hard to break. The GP entity is essentially a cash-collection vehicle. It carries no operating liabilities beyond nominal Delaware filing fees, so there is no realistic path to its insolvency. In a wind-down it can simply keep operating and collecting fees, which leaves existing funds undisturbed. The limited partnership agreement also provides transition mechanics for the general partner role, so a fund community is not locked to Legion’s GP entity.
3. Regulatory reporting does not reach your fund. The ERA is Legion’s own regulatory reporting registration. Winding it down affects only Legion’s filings. Existing funds and SPVs that were originated and reported under that ERA are not affected.

The failure this is designed to prevent

The scenario managers worry about, because it actually happened in this market, is specific. An SPV administrator is prepaid for several years of service, the administrator fails, and investors both lose the prepaid fees and have to pay a new administrator to take the fund over. A double cost plus an operational scramble at the worst possible time. Because Legion uses an independent administrator billed on an ongoing basis, paid from the vehicle rather than prepaid to the platform, that specific loss cannot occur here.

Records and money sit outside Legion

• Books with an independent administrator. Formidium holds the capital accounts, NAV, and investor statements, independent of Legion.
• Banking outside Legion. Cash and payment rails sit with a regulated banking provider, independent of Legion.
• Exportable at any time. Executed documents live in the investor and general partner document vault and in independent cloud storage, and can be exported at any time.

Optional additional backstop

Because administration is billed on an ongoing basis rather than prepaid, existing funding is already protected. As an extra assurance for a fund lead who wants it, Legion can ring-fence prepaid administration for a defined period in a segregated account, so administration stays funded even through a disorderly wind-down. Ask us about this during onboarding.

Questions

This policy is reviewed at least annually and on any change of fund administrator or banking provider.

This policy is also available as plain Markdown at uselegion.com/business-continuity.md.