Bloomberg has called him “the most feared man in the most aggressive realm of finance” but this week the 69-year-old co-founder of $414 billion Apollo Global Management has made headlines for different reasons; his links to pedophile Jeffrey Epstein.
First reported on by the New York Times, Black was found to have paid at least $50 million to Epstein after Epstein had been convicted of soliciting sex from a minor in 2008. According to the article, at least one of the transactions was flagged as ‘unusual’ by Deutsche Bank.
Epstein first pleaded guilty to state prostitution offences in 2008 and is believed to have solicited hundreds of underage girls for prominent figures in business and politics. He was arrested last year on charges of sex trafficking but died from what has been ruled a suicide in August 2019 while awaiting trial.
As reported by the Financial Times, Black’s spokeswoman said Black received “personal trusts and estates planning advice as well as family office philanthropy and investment services” from Epstein between 2012 and 2017. Earlier this week Apollo Global Management hired an outside law firm to investigate Black’s links with Epstein, a move allegedly instigated by Black himself.
It may not be enough; multiple investors have distanced themselves from Apollo. Notably, the Pennsylvania Public School Employees’ Retirement System (PSERS) spoke with Apollo after the links surfaced, explaining to the Financial Times that, “After that phone conversation, PSERS’ investment team informed Apollo that it will not consider any new investments at this time.”
"Bloomberg has called him “the most feared man in the most aggressive realm of finance”"
An Apollo spokesperson has confirmed that Apollo itself never had any dealings with Epstein. Meanwhile, Black wrote a letter to investors following the NYT’s report explaining, “It is true that I paid Mr Epstein millions of dollars annually for his work. It also is worth noting that all of Mr Epstein’s advice was vetted by leading auditors, law firms and other professional advisors.”
The letter went on to explain that Black and his family had picnicked with Epstein on his private island and that Black met Epstein at his New York residence “from time to time” as Epstein did not have an external office. Black’s spokeswoman added that Black and Epstein ceased communications in 2018 (a decade after Epstein’s conviction) after a fee dispute and that Black “deeply regrets having any involvement with him”. He may come to regret his involvement even more.
Born in 1951 to Eli M. Black, owner of the United Brands Company, and artist Shirley Lubell, Leon Black’s twin interests of business and art were established early on. Today, Black is the chairman of the Museum of Modern Art (MoMA) in New York City, while his private equity fund, Apollo Global Management, which Black co-founded in 1990 with (amongst others) managing partners Josh Harris and Marc Rowan, had $414 billion of assets under management as of June 2020.
Before all of that, Black was a student at Dartmouth then Harvard before getting a foot in the door as an accountant at Peat Marwick, the company that would become KPMG. Around this time he also interviewed at Lehman Brothers but was told that he “didn’t have the brains or personality to succeed on Wall Street.” Nevertheless, in the following years Black worked numerous roles in mergers and acquisitions, including as managing director at Drexel Burnham Lambert. When that company collapsed in 1990, Black founded Apollo.
The company grew rapidly. In the early days it built its reputation by acquiring interests in companies that Drexel had perviously helped finance through purchasing high-yield bonds from failed savings and loans as well as insurance companies. One of the company’s largest acquisitions at the time was the Executive Life Insurance Company’s bond portfolio. In 2002, California Attorney General Bill Lockyer accused Apollo, Leon Black and an investor group led by French bank Credit Lyonnais of illegally acquiring the assets. Lockyer claims the group violated a California law prohibiting foreign government-owned banks from owning California insurance companies.
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