The founders of Apollo Global Management, one of the world’s largest private equity firms, had a brief power struggle for control of the company this weekend. That gap widened after an investigation found that a founder – Apollo’s executive director and chairman Leon Black – had paid convicted sex offender Jeffrey Epstein $ 150 million.
On Monday, Mr. Black announced his plan to step down as CEO of the company this year.
“I have notified the Apollo board of directors that on or before my 70th birthday in July I will be retiring as CEO and remaining as chairman,” he said in a statement.
The review, ordered by the company’s board of directors in October after the New York Times estimated payments of at least $ 75 million at the behest of Mr. Black, found that Mr. Black was alleged to have been involved with Mr. Epstein by two trusted persons had paid significantly more in a request requesting anonymity because the report was not public. The sum effectively funded the shameful financier’s lifestyle for the years following his pleading guilty on a Florida prostitution charge involving a young girl.
The investigation found no evidence of any wrongdoing on the part of Mr. Black, according to someone familiar with the investigation.
The results sparked friction between Mr. Black and one of the other Apollo founders, Joshua Harris, according to three people who were briefed on the discussions. One respondent said Mr. Harris believed that Mr. Black had shown poor judgment in working with Mr. Epstein and that the new findings would further damage Apollo’s reputation. In the past few months, Apollo investors had begun to openly question the financial relationship between Mr. Black and Mr. Epstein, who passed away in 2019.
Apollo’s board held a video conference Sunday to approve the results of the review, according to two people briefed on the discussions. During the meeting, Mr. Black also announced his plans to step down this year and hand over the position of Chief Executive to Marc Rowan, Apollo’s third founder. Mr. Black intends to remain chairman of the private equity giant. New York-based Apollo manages $ 433 billion for institutional investors, including retirement plans and sovereign wealth funds.
Business & Economy
Jan. 25, 2021, 2:41 p.m. ET
Apollo’s board of directors should release the assessment this week, the person said.
During a number of Sunday evening meetings, including with individual board members, Mr. Harris objected to Mr. Black’s schedule for resignation, believing the reputational threat was so serious that Mr. Black should immediately resign from the role of chairman of the board. said the people. Mr. Harris also demonstrated his case to his co-founders that evening in talks with the Apollo Executive Committee, which consists of the three.
In the end, Mr Harris’s objection fell on deaf ears, said people asking for anonymity to discuss private consultations.
Mr. Rowan, who built Apollo’s insurance business but has largely moved away from the day-to-day running of the company in recent years, will take over when Mr. Black turns 70 in late July.
Mr Black was expected to send a letter to Apollo’s customers Monday evening to inform them of the succession plan and the results of the review, one respondent said. Mr. Harris would continue in his current role as Senior Managing Director, focused on the company’s financial performance and working closely with Mr. Rowan, according to the letter, the contents of which have been described to the Times. The letter was also intended to inform clients of other proposed governance changes and set out Mr. Black’s plan to donate $ 200 million to charities that support gender equality and combat sex trafficking.