In what Axios has described as "the most significant private equity retirement ever", Leon Black, CEO and chairman of the Apollo Global Management, has abruptly announced that he is making a complete break with the pioneering private equity firm that he founded in the wake of Drexel Burnham Lambert's collapse.
While Black attributed his departure to health issues, this excuse was so thin as to be transparent: Black is making a complete break with the company amid intensifying pressure for the firm's clients to cut ties over Black's closeness to Jeffrey Epstein, the unrepentant convicted pedophile who is still the focus of one of the most closely watched legal proceedings in the US more than 2 years after his death.
Axios broke the news, and in its report, it pointed out that while Black had been planning to abdicate the CEO role in the coming months, he still hoped to stay on as chairman. Instead of waiting until July to turn over the CEO reins to Apollo co-founder Marc Rowan, Black is leaving immediately, and in addition to turning over the CEO role to Rowan, he is turning over the chairman's seat to former Trump-era SEC head Jay Clayton.
Apollo also added two new directors: Richard Emerson (ex-Evercore Partners, Microsoft) and Kerry Murphy Healey (former Lt. Gov of Massachusetts).
In a relatively terse goodbye statement, Black touted his expectation that Wall Street will be blown away by Apollo's Q1 numbers, while also recounting the damage that COVID-19 has visited on his extended family (and the toll that all the speculation about his ties to Epstein, which elicited an internal investigation, has taken on his health) : Apollo Founder Leon Black said, “I am extremely pleased that we have filled out the two-thirds independent board with such highly-qualified, diverse individuals. In the last few months, not only did we announce a transformative merger with Athene, but also expect to report that our first quarter earnings will exceed analyst consensus in all relevant measures and that the first quarter fundraising is trending towards the high end of our $15-20b annual range. I thus view this as the ideal moment to step back and focus on my family, my wife Debra’s and my health issues, and my many other interests.” “Marc has seamlessly transitioned into the CEO role and I am confident Apollo will soar to new heights under his leadership. He will be in great company alongside seasoned leaders Jim Zelter and Scott Kleinman,” Black continued. “Over the past 30-plus years, my co-founders, Marc, Josh Harris and I, have worked extremely hard to make Apollo a franchise built for enduring success. I believe strongly that Apollo’s best days lie ahead. I intend to remain Apollo’s largest shareholder, and strongest supporter.”
Black's successor, Apollo co-Founder and fellow billionaire Marc Rowan, said "Leon has been a terrific partner and leader for over three decades and I am honored to take the reins. At Apollo, we have created a differentiated model and built the best team in the business to lead within an evolving, high-growth asset management industry. I am excited by the opportunities ahead and by our strategy to continue to deliver for our clients and investors."
In a memo to staff published Sunday, Black said "life is short" and that he planned to focus on his many other interests, "including the arts, culture, medical research and philanthropy," per the FT.
According to an independent internal probe authorized by Apollo, Black infamously paid Epstein more than $150M for "estate-planning services" over a five year period ending in 2017. The payments started after Epstein had received his initial conviction on prostitution-linked charges (which also landed Epstein on the sex offender registry).
News of Black's payouts to Epstein sparked rumors that Black might have been among a group of elite businessmen and politicians whom Epstein had managed to entrap with kompromat depicting them in sexually compromising situations - what was said to be Epstein's modus operandi. Though Black has also suffered from some health issues, his departure comes as pressure on Apollo over the Epstein controversy has been steadily building, with activists demanding Black depart the firm, since the findings of the internal Epstein probe were released back in January. The firm's decision to pass on picking the bones of collapsed Aussie trade-finance firm Greensill followed a wave of criticism.
With everything going on, we can't help but wonder...
*APOLLO: ROWAN ASSUMES CEO ROLE; BLACK TO FOCUS ON HEALTH ISSUES— zerohedge (@zerohedge) March 22, 2021
Is he going to hire underage female doctors to fix his health?
Black's departure comes just hours after the FT published a lengthy examination of Apollo's merger with Athene, its insurance affiliate, something that the FT claimed could elevate Apollo to rival Warren Buffett's Berkshire Hathaway.