Apollo’s new CEO predicts end to investor ‘pause’ after Epstein report

Marc Rowan, the incoming chief executive of Apollo Global Management, projected confidence that investors would swiftly return to committing capital to the firm after a report by outside lawyers into his predecessor’s ties to Jeffrey Epstein.

A co-founder of Apollo who played a leading role in building the firm’s credit and insurance business, Mr Rowan had announced a “semi-sabbatical” in July.

But he came back to take over as chief executive from Leon Black, who announced last week that he would relinquish the role but remain chairman.

“Clearly, in hindsight, taking a sabbatical in the middle of a pandemic is a very bad idea,” Mr Rowan told analysts on Wednesday. “I went nowhere and I did nothing.”

Mr Black’s departure as chief executive — which will take effect by the end of July — followed the disclosure that he had paid $158m to Epstein between 2012 and 2017 for tax advice and other services.

A report by international law firm Dechert, which Apollo had hired to probe the relationship between the two men, found no evidence that Mr Black had any involvement in Epstein’s criminal activities, and nothing to suggest that Epstein had done business with Apollo.

Apollo had warned in October that its capital-raising activities would slow as some investors awaited the findings of the investigation. The firm reported capital inflows of $13bn in the last three months of 2020, little changed from the previous quarter.

“In the fourth quarter, a number of people hit pause, simply to wait to see the outcome [of the review],” Mr Rowan said. “I believe in the first quarter, we will see some of that pause simply come through, and then we will get stronger every day.”

Mr Rowan said he had spoken to many investors since the report was unveiled last week. “They’ve commended us on the actions we’ve taken with respect to the governance changes and the succession planning,” he added.

Those reforms include the addition of four independent directors and the elimination of a dual-class share structure to allow outside investors a bigger say in how the firm is run.

The moves follow similar action by peers including Blackstone, KKR and Carlyle Group, and are aimed at broadening the ownership of the firm’s shares and paving the way for inclusion in a wider range of financial indices.

“All of us are moving from the small private partnerships that we started life as, to important components of a more global financial system,” Mr Rowan said.

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