Apollo’s Leon Black seeks to reassure investors over Epstein ties
Private equity firm co-founder admits ‘limited relationship’ with financier
Apollo Global Management’s billionaire cofounder Leon Black has sought to reassure investors over his ties to Jeffrey Epstein, saying that the registered sex offender had never invested in any of the firm’s private equity funds.
The firm “does not have and never has had, any relationship with Mr Epstein”, Mr Black said in a letter sent to Apollo’s investors late on Wednesday and seen by the Financial Times.
However, Apollo’s chairman and chief executive acknowleged his “limited relationship” with Mr Epstein, who pleaded guilty to state prostitution offences in 2008, and was accused last month by federal prosecutors of sexually abusing dozens of underage girls at his homes between 2002 and 2005. He has denied the charges.
In the letter, Mr Black, one of Wall Street’s most powerful financiers, told investors that Mr Epstein had “from time to time”
provided tax, estate planning and philanthropic advice to his family investment partnerships. The two men had donated money to charities each were involved with and that Mr Epstein was an original trustee of the Black Family Foundation from 1997. Mr Epstein left the board of the foundation in 2007, Mr Black wrote.
He added that he was “completely unaware” and “deeply troubled” by the conduct described in the charges Mr Epstein now faces.
Since his arrest last month, Mr Epstein’s links to prominent business figures, politicians and academics are coming under scrutiny. Mr Epstein was a teacher at an elite school in Manhattan before beginning his association with Wall Street by taking a job at Bear Stearns.
Mr Black’s letter to investors in Apollo funds, known as limited partners, follows the release of Apollo’s second-quarter results on Wednesday. On an accompanying earnings call, a JP Morgan analyst alluded to a Bloomberg News report that California state pension fund Calpers, a large Apollo shareholder as well as an investor in its funds, had expressed concern about Mr Black’s links to Mr Epstein.
On the call, Mr Black responded by saying that “our view right now is that it is not affecting our relationship with investors”.
In the letter to Apollo investors, Mr Black concluded by writing: “I want to reiterate our deep commitment to operating with integrity and consistent with the highest ethical standards . . . and I’m sorry if this recent media attention has been a distraction or has caused you any concern.”
Mr Black also denied recent news reports that he had promoted Mr Epstein’s services to other Apollo executives. No other Apollo employee did business with Mr Epstein, he wrote.
Mr Black and several other former employees of investment bank Drexel Burnham Lambert formed Apollo in 1990. Apollo now manages more than $300bn and its backers include many of the world’s largest pensions and sovereign wealth funds.