The founders of Apollo Global Management, one of the largest private equity firms in the world, waged a brief power struggle this weekend for control of the company, a loophole that opened after an investigation revealed that one of the founders – the president – Apollo executive and president Leon Black – paid $ 150 million to convicted sex offender Jeffrey Epstein.
On Monday, Black announced his plan to step down as chief executive of the company this year.
“I warned the Apollo board that I will retire as CEO in July or before my 70th birthday and remain as president,” he said in a statement.
The review – ordered by the company’s board in October after The New York Times detailed at least $ 75 million in payments at Black’s request – found that Black paid Epstein significantly more, according to two people familiar with the investigation, who requested anonymity because the report was not public. The sum effectively financed the disgruntled financier’s lifestyle in the years after his plea of guilt in 2008 to a Florida prostitution charge involving a teenager.
The investigation found no evidence of crimes committed by Black, according to a person familiar with the investigation.
The findings created friction between Black and one of the other Apollo founders, Joshua Harris, according to three people informed about the discussions. One of the people said that Harris believed that Black had no common sense when associating with Epstein, and that the new findings would further damage Apollo’s reputation. In recent months, Apollo investors have begun to openly question the financial ties between Black and Epstein, who died in 2019.
Apollo’s board held a video conference on Sunday to approve the results of the review, according to two people informed about the discussions. At the meeting, Black also announced his plans to step down this year and hand over the job of chief executive to Marc Rowan, Apollo’s third founder. Mr. Black intends to remain president of the private equity giant. New York-based Apollo manages $ 433 billion for institutional investors, including pension plans and sovereign wealth funds.
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Apollo’s board is expected to release the review this week, the person said.
During a series of meetings on Sunday night, including with individual board members, Mr. Harris objected to Mr. Black’s timetable for resigning, believing that the threat to reputation was so serious that Mr. Black should resign. chief executive without delay, people said. Harris also presented his case to his co-founders that night in discussions with the Apollo executive committee – which consists of three of them.
In the end, Harris’ objection fell on deaf ears, said the people, who requested anonymity to discuss private deliberations.
Rowan, who built Apollo’s insurance business but has largely moved away from the company’s daily operations in recent years, will take over when Black turns 70 in late July, people said.
Black was supposed to inform Apollo’s clients about the succession plan and the findings of the review in a letter Monday night, one person said. Mr. Harris would continue in his current role as senior managing director, focusing on the company’s financial performance and working closely with Mr. Rowan, according to the letter, the content of which was described to The Times. The letter should also inform clients about other proposed governance changes and set out Mr. Black’s plan to donate $ 200 million to charities that support gender equality and fight against sex trafficking.