The founders of Apollo Global Management, one of the world’s biggest private equity firms, engaged in a brief power struggle this weekend over control of the firm, a rift that opened up after an inquiry revealed that one founder — Apollo’s chief executive and chairman, Leon Black — had 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 have advised the Apollo board that I will retire as CEO on or before my 70th birthday in July and remain as chairman,” he said in a statement.
The review — ordered by the firm’s board in October after The New York Times detailed at least $75 million in payments — found that Black had paid Epstein significantly more, according to two people familiar with the inquiry, who requested anonymity because the report was not public. The sum effectively bankrolled the disgraced financier’s lifestyle in the years after his 2008 guilty plea to a Florida prostitution charge involving a teenage girl.
The investigation found no evidence of wrongdoing by Black, according to a person familiar with the inquiry.
The findings created friction between Black and one of Apollo’s other founders, Joshua Harris, according to three people briefed on the discussions. One of the people said Harris believed that Black showed poor judgment in consorting with Epstein, and that the new findings would further hurt Apollo’s reputation. In recent months, Apollo investors had begun openly questioning the financial ties between Black and Epstein, who died in 2019.
Apollo’s board held a videoconference Sunday to approve the findings of the review, according to two people briefed on the discussions. At the meeting, Black also announced his plans to step down this year and hand over the chief executive job to Marc Rowan, Apollo’s third founder. Black intends to remain chairman of the private equity behemoth. Apollo, based in New York, manages $433 billion for institutional investors, including pension plans and sovereign wealth funds.
Apollo’s board was expected to release the review this week, the person said.
During a series of meetings on Sunday evening, including with individual board members, Harris raised objections to Black’s timeline for stepping down, believing that the reputational threat was so serious that Black should relinquish the chief executive role without delay, the people said. Harris also made his case to his co-founders that night in discussions with Apollo’s executive committee — which consists of the 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 had largely stepped away from the firm’s day-to-day operations in recent years, will take over by the time Black turns 70 at the end of July, the people said.
Black was expected to inform Apollo’s clients of the succession plan and the findings of the review in a letter Monday evening, one of the people said. Harris would continue in his current role as a senior managing director, focused on the firm’s financial performance and working closely with Rowan, according to the letter, the contents of which were described to The Times. The letter was also expected to inform clients of other proposed governance changes and lay out Black’s plan to donate $200 million to charities that support gender equality and fight sex trafficking.