NEW YORK (Reuters) – Leon Black said on Monday he would relinquish his chief executive post at Apollo Global Management (NYSE:APO) Inc following the buyout firm’s independent review of his ties to the late financier and convicted sex offender Jeffrey Epstein.
The review, conducted by law firm Dechert LLP, found Black was not involved in any way with Epstein’s criminal activities. Black, the review found, paid Epstein bona fide fees for advice on tax and estate planning, and other related services.
Nevertheless, Apollo said it would undertake efforts to strengthen its corporate governance to allow the board to oversee “all aspects” of the buyout firm and delegate less of that work.
Apollo co-founder Marc Rowan will take over as CEO, with Black remaining Apollo’s chairman, the firm said.
The sudden end to Black’s management of Apollo, a New York-based firm he co-founded 31 years ago and turned into one of the world’s largest private equity and credit investment groups, reflects the toll that revelations of his ties to Epstein took on the investment firm’s business.
Apollo executives had warned in October that some investors had paused their commitments to Apollo’s funds as they awaited the review’s findings.
Apollo shares missed out on a stock market rally and are down 1% since the New York Times reported on Oct. 12 that Black paid at least $50 million to Epstein for advice and services, when most of his clients had deserted him. Shares of peers Blackstone Group (NYSE:BX) Inc, KKR & Co (NYSE:KKR) Inc and Carlyle Group (NASDAQ:CG) Inc are up 19%, 10% and 23% over that period, respectively.
The conflicts committee of Apollo’s board pursued the review with Black’s support in October. In a letter to Apollo’s fund investors earlier that month, Black said he regretted previous business and social relationships with Epstein, while denying any wrongdoing or inappropriate conduct.