Apollo’s Leon Black says giving Epstein a second chance was ‘a terrible mistake’

Apollo Global Management CEO Leon Black said Thursday that giving Jeffrey Epstein a second chance following the late financier’s imprisonment in 2008 for soliciting an underage prostitute in

Apollo Global Management CEO Leon Black said Thursday that giving Jeffrey Epstein a second chance following the late financier’s imprisonment in 2008 for soliciting an underage prostitute in Florida was a “terrible mistake.”

Black gave his most comprehensive account to date of his ties with Epstein on Apollo’s third-quarter earnings call, as he acknowledged that what he has called a personal matter was now affecting the private equity firm he co-founded in 1990 and still controls.

Several investors in Apollo’s funds expressed concerns after Black said earlier this month that he regretted payments to Epstein of between $50 million and $75 million over the last decade for what he called “professional services.”

“Let me be clear, there has never been an allegation by anyone that I engaged in any wrongdoing, because I did not. Any suggestion of blackmail or any other connection to Epstein’s reprehensible conduct is categorically untrue,” Black said on the call.

Black said he first met Epstein in 1996, when the latter was advising prominent clients, including several heads of state, Nobel laureates, and even a US treasury secretary. The 69-year-old private equity veteran said he was not aware of Epstein’s criminal conduct until media reports surfaced in late 2006 of federal and Florida investigations into Epstein.

Black said that in 2012, three years after Epstein got out of jail following his conviction on soliciting prostitution from a minor, he retained Epstein for “personal estate planning, tax structuring and philanthropic advice” because of “misplaced comfort” in the “distinguished reputations” of the individuals in high society that Epstein continued to associate with.

“This was a terrible mistake. Had I known any of the facts about Epstein’s sickening and repulsive conduct, which I learned in late 2018, more than a year after I stopped working with them, I never would have had anything to do with him,” Black said.

Epstein was found hanged at age 66 in August 2019 in a Manhattan jail, while awaiting trial on sex trafficking charges for abusing women and girls in Manhattan and Florida from 2002 to 2005. He had pleaded not guilty.

Federal prosecutors and lawyers have sued Epstein’s more than $630 million estate to obtain compensation for the young women and girls he allegedly abused and trafficked.

In January, US Virgin Islands Attorney General Denise George sued the estate, seeking claims on behalf of victims he raped and trafficked on a private Caribbean island.

Black has said he intends to cooperate with the US Virgin Islands inquiry and any other investigation.

Apollo said that Epstein never did any work for the New York-based firm and announced last week that three board directors tasked with probing Black’s ties to Epstein had retained law firm Dechert LLP to launch a full review.

Apollo Chief Financial Officer Martin Kelly said on Thursday the review would include going though emails and interviewing people. He said he hoped it would be concluded by the end of the year.

Apollo co-founder and Senior Managing Director Josh Harris, seen as Black’s likely successor were he to step down, said the firm expected fundraising would slow down in the near term, as some investors waited for the review’s findings.

Kelly added that only 3 percent of the investor money Apollo manages could be withdrawn in the next two years, and that the firm’s big insurance investment portfolio buttressed its income from a slowdown in fundraising.

Apollo shares were down 2.8 percent at $37.82 in afternoon trading in New York on Thursday. “Although the stock appears oversold to us, the ring-fencing seems mostly discounted,” Citigroup Inc analyst Bill Katz wrote in a note following the earnings call.


Apollo reported a steeper than expected drop in third-quarter profit. Distributable earnings (DE) – the cash available for paying dividends to shareholders – fell to $205.1 million from $222.5 million a year earlier, as a big rise in profit in Apollo’s credit businesses was not enough to offset a steep drop in its private equity and real estate divisions.

That translated to DE per share of 47 cents, underperforming Wall Street analysts’ average forecast of 49 cents, according to data from Refinitiv.

Apollo said the value of its credit funds appreciated 3.7 percent in aggregate in the third quarter, with its private equity portfolio rising 8 percent. Its real estate, principal finance and infrastructure funds climbed 3.4 percent in aggregate.

Blackstone Group, the world’s largest private equity firm, reported a 9 percent rise in third-quarter distributable earnings on Wednesday, while its private equity portfolio appreciated by 12.2 percent.

Carlyle Group reported a smaller-than-expected 6 percent drop in its third-quarter distributable earnings on Thursday, with its overall fund portfolio rising 5 percent during the quarter.

Apollo said total assets under management rose to $433.1 billion as of the end of September, up from $414 billion three months earlier.

It ended the quarter with $45.8 billion in unspent capital and said it would pay a quarterly dividend of 51 cents a share.

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