So apparently Apollo's board is looking into Leon's ties with Epstein and this comes off as a really big deal given it's his own damn company. I feel like this would only be done by their board if some real serious shit was coming to light. Also one major investor in Apollo has announced they are stopping their investments in anything Apollo related while the inquiries continue. I'd imagine they are only the first and more will try and stay away from the firm while all of this continues.
What do people here think or know about this situation here? If this keeps going south this could get real ugly for the firm. Harris must be losing his shit cause he owns multiple pro sports teams and I wouldn't be surprised to see the leagues try to force him out if Leon were to get indicted over something of this magnitude.
I would be so happy if Harris was forced to sell the Sixers
Facts that man is a garbage owner. As a lifelong Mets fan I was hyped to see Uncle Stevie not let him buy the team
After fucking their associates for years, people now realize they also fucked children. Not a big news to me
Call me skeptical but I wouldn't be surprised that this being at his request is more about a PR decision made by his firm than his own choice. I'm in no way implying the guy is guilty of anything relating to Epstein, but it's pretty insane how he kept his relationship with Epstein for so long given all the warning signs that were there prior. His lack of judgement is quite astounding on that count and if I had capital there I would be very worried and seriously consider pulling it. That said if anyone is capable of buying his way out of trouble it's definitely Leon.
Who cares they have market leading irrs
Yeah that's not true. Last flagship fund w/ a 2x+ MOIC was a 2001 vintage fund. Could argue Fund IX is still in its J-curve, but even excluding that four of their last six funds have single digit IRRs (or are barely double digits, like sub-11%). In any case, that's certainly nowhere close to "market leading."
Edit 1: Lol whoever gave MS has no idea what they're talking about - would love to see a rebuttal of what I wrote above.
Edit 2: Compare Apollo to like a Silver Lake (Funds I-V all 1st or 2nd quartile, only one fund w/ single digit net IRRs), H&F (all funds except most recent one 1st or 2nd quartile and double digit IRRs, with most generating 20%+), Thoma (most recent five funds all 1st or 2nd quartile, all delivering double digits net and three of five delivering 25%+), CD&R (most recent five funds all 1st or 2nd quartile and only one with single digit IRRs), and you'll see how Apollo is outclassed by many other firms.
Edit 3: Lol at all the salty APO employees I guess.
22.1% net IRR on Apollo Investment Fund VII (2008) was 1st quartile. Apollo Investment Fund VI was 2nd quartile
Fund VI - 8%
Fund VII - 22%
Fund VIII - 7%
Its certainly a problem, especially in today's heightened ESG environment. If you're a public pension and you're an investor in these funds, the public pressure could force you to sell the interests and not re-up in the next fund. And as a buyer, how you can say - oh we're buying from an investor who has ESG concerns, but we think its fine?
Leon may have to fall on his sword here, this is damaging to the firm. IF that happens, Apollo will be fine. But from a headline perspective, its risky for Apollo right now.
"Really big deal considering its his own damn company" ? Um, no, not at all.
This is literally Leon telling the Board (which is comprised of his partners/hangers on) to act like they are taking scandal rumors very seriously, will do a thorough and objective proctology exam, and will conclude that Leon and Apollo both get a clean bill of health.
It's the equivalent of Jonny Depp, during his divorce proceedings, announcing that his agent and manager have both decided to conduct a thorough independent investigation into allegations of his profligate spending draining his marital estate of assets.
To no one's surprise the investigation will come to a swift conclusion as follows:
Leon should have been more discriminating in deciding who he associates with, but in addition to his many evils, Jeffrey Epstein was also masquerading as a prolific philanthropist and patron of the arts and sciences, which Leon was naturally drawn to. If anything Leon fell victim to his own naivete, indefatigable willingness to see the best in people, and blind dedication to helping widows, orphans, operas, and ballets. If Leon is guilty of anything, it's of being TOO generous, TOO kind, and TOO noble-hearted. Be that as it may, this has been a valuable lesson, Apollo as a firm was in no way involved in any wrong-doing.
You lost me when you compared Johnny Depp draining wealth from his estate to Leon paying $50 mill and being close friends to the most prominent sex trafficker of our time... These things are an order of magnitude apart.
I can't say I'm surprised that you got lost you at all.
I wasn't comparing Johnny Depp's situation to that of Leon Black. I was comparing the charade that is an "independent" investigation being done by a bunch of insiders who are tasked with "objectively" investigating their golden goose.
Apollo's largest LPs have already come out and said they're very concerned, and will not re-invest as things currently stand. If that's not a big deal, I don't know what is.
lol
Read the articles. When LPs stop investing, that's when things start to get serious.
One of the biggest US public pension funds has frozen new investments with Apollo Global Management, as growing concerns about founder Leon Black’s relationship with the late paedophile Jeffrey Epstein take a toll on the $414bn private equity group.
The Pennsylvania Public School Employees’ Retirement System said it had a discussion with Apollo last week following reports that Epstein had received at least $50m in payments from Mr Black since 2008, when Epstein was convicted for soliciting sex from a minor.
https://www.ft.com/content/7aa15cae-0baf-488b-8713-c4dc29bf193c
The independent review will come back clean. Either Leon hide stuff beforehand or there will be collusion in some way. You really think the multi-billionaire, private equity titan co-founder of Apollo will allow an indepebdent review without covering his ass? Lol this is a PR stunt. I hope these pension funds and other institutional investors do pull their money from Apollo. It’s a strong message to show that you don’t put profits over human decency.
>profits over human decency
Pretty sure everyone already knows they're doing this, they just want to believe the illusion that they're not doing this
I’m pretty sure Leon will be fine given the support he has garnered at the partner / board level. Like others have suggested, the review will be fine and he will likely be reprimanded in some kind of investor letter or worst case stripped of his CEO position but retain his chairman role on the board or something of of the sort. He is a careful man and has many contingencies in place to help cushion a blow such as this. If LPs actually pull out / don’t reinvest then it’s possible he could quickly be ousted but the man is Apollo through and through and has thus far been a bedrock in garnering investor confidence as evidenced by the firms growth. That being said fuck that place and let’s see if the worst case scenario pans out
I’m pretty sure Leon will be fine given the support he has garnered at the partner / board level. Like others have suggested, the review will be fine and he will likely be reprimanded in some kind of investor letter or worst case stripped of his CEO position but retain his chairman role on the board or something of of the sort. He is a careful man and has many contingencies in place to help cushion a blow such as this. If LPs actually pull out / don’t reinvest then it’s possible he could quickly be ousted but the man is Apollo through and through and has thus far been a bedrock in garnering investor confidence as evidenced by the firms growth. That being said fuck that place and let’s see if the worst case scenario pans out
Happy to hear your insight as someone who actually has worked within the firm. It looks like a few LP's have already decided against considering re-investment but I don't think I've read anything along the lines of capital being pulled that's already been committed. Just out of curiosity, have you heard anything about the situation from former colleagues within the firm and how long ago did you work there? I totally understand if you don't want to comment on that though for anonymity reasons of course. I've read some of the crazy threads on what it's like working there and that it's a total sweatshop and ruthless as hell. Given your last comment it seems like you hated your experience there and I was wondering if you could elaborate more as to why you hate the firm. Of course the absurd workload kind of goes without saying but I get the feeling there's probably more to it.
Sure - I didn't like that the underlying culture perpetuated working around the clock literally including weekends and that there was a big divide between the Associate level and the ranks above since a lot of the senior associates / principals never worked as associates here. A lot of the work tended to be gratuitous in terms of making unnecessary deliverables for IC meetings as well as other workstreams which often times seemed created for the purpose of people pleasing partners and other senior professionals. As a result, I often worked way more hours than banking (which is ridiculous considering banking is client-driven) and me and my assoc. colleagues would often get verbally berated beyond belief. I'm a pretty thick-skinned guy but there is only so much shit one can take, especially when it comes to extraneous work. I can provide additional color to whatever I just said but that was a core gripe for me
edit - to answer your other questions, I was there for a couple years, pretty standard, and my colleagues were the same though one of them stayed on despite hating his/her life
What contingencies are you referring to?
Nothing specific - my point was more based on him having those measures in place in the event his ties were to go public etc
Man what kind of estate planning did Epstein run to get paid $50mil from Leon? If you're paying that much, it sure as hell isn't a "limited" relationship, and also not likely just estate planning
Exactly. This is lunacy. If you were a billionaire, who would you go to for estate planning and to protect your billions? A lawyer from Sullivan Cromwell or Cleary Gottlieb? Or a man convicted of soliciting prostitutes, who's neither a lawyer nor licensed in any kind of financial advisory capacity like Epstein?
#1- Apollo was created by Leon in his own image. The firm is cheap as fuck. They seldom pay advisors/vendors even when they’ve earned it. So the idea that Leon paid $75,000,000 to someone gratuitously beggars belief.
#2- If you’ve ever dealt with tax and estate planning at the level of a billionaire, you know that the complexity is of a titanic proportion. The idea that Leon had anyone other than a team of tax rocket scientists (akin to the Kobe Bryant and Michael Phelps of tax arcana) making estate decisions is ludicrous.
Therefore, based on point 1, Leon clearly associated with and paid Epstein for a benefit of a valued dwarfed by the already preposterous sum of $75MM he paid Epstein. And based on point 2, the likelihood that was tax advice his absolutely ZERO.
... to no one’s surprise at all.
And so we get to the real question. We all know that billionaires play by a different set of rules (how many billionaires have ever been sentenced to jail for a non-tax-related and non-financial crime?). Leon has sought to test the notion by posing the question: how heinous and reckless can you get, while still being able to bury any ramifications under a pile of money?
I think most people will be surprised at how unscathed he emerges from all this. Worst case, he’ll probably have to step down from Apollo, which at 70 years old and >300lbs, he would have done soon anyway.
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