Leon Black is to step aside as chief executive of Apollo Global Management, the company announced on Monday, as it revealed he had made far larger payments than previously known to the late paedophile Jeffrey Epstein.
Mr Black, who founded Apollo in 1990, paid $158m to Epstein over a five-year period ending in 2017, according to a report by the law firm Dechert.
The sum was “intended to be proportional to the value provided” by Epstein’s advice on issues ranging from trust and estate planning to Mr Black’s yacht and private plane, Dechert said.
According to the report, Mr Black believed that Epstein’s advice, which was vetted by outside lawyers, had “conferred more than $1bn and as much as $2bn or more in value”.
Mr Black said the findings “confirm the key facts I have previously disclosed concerning my relationship with Jeffrey Epstein, including that I was completely unaware of Mr Epstein’s abhorrent misconduct that came to light in late 2018”.
The leadership change will take place “on or before” July 31, Apollo said, and was part of a transition to “best-in-class governance practices”. Mr Black will remain as chairman.
He will be replaced as chief executive by his co-founder Marc Rowan, who seized on the financial crisis as an opportunity to branch out into insurance, helping to create a $300bn credit platform that has been the company’s principal growth engine for the past decade.
Apollo is also elevating to its board the two “co-presidents”, Scott Kleinman and James Zelter, who assumed day-to-day responsibility for many investing activities in 2017. The company is also adding four new independent directors, including Siddhartha Mukherjee, the oncologist and Pulitzer Prize-winning author. It also announced plans to abandon a dual-class share structure that gave extra voting rights to Mr Black and his two co-founders.
Apollo has been trying to reassure investors about its founder’s personal business activities since October, when The New York Times reported that Mr Black had paid at least $50m to Epstein in the years after his 2008 conviction for soliciting sex from a minor.
The revelation put pressure on Apollo. Days later, the Pennsylvania Public School Employees’ Retirement System — one of the largest in the US — told the Financial Times it was freezing new investments with the company, a stance since echoed by several other investors.
The attention garnered by the Epstein payments prompted Mr Black to ask Apollo’s conflicts committee to appoint outside lawyers to confirm his account of the relationship.