Leon Black said on Monday he would relinquish his chief executive post at Apollo Global Management Inc following an 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 paid Epstein $158 million for advice on tax and estate planning and related services between 2012 and 2017, according to the review.
Black, 69, said although the Dechert review confirmed he did not engage in any wrongdoing, he “deeply” regretted his involvement with Epstein.
“I hope that the results of the review, and related enhancements, will reaffirm to you that Apollo is dedicated to the highest levels of transparency and governance,” Black wrote in a note to Apollo fund investors seen by Reuters.
Apollo co-founder Marc Rowan, 58, will take over as CEO, with Black remaining Apollo’s chairman, the firm said.
The revelations of Black’s ties took a toll on the 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.
Apollo executives had warned in October that some investors had paused their commitments to the buyout firm’s funds as they awaited the review’s findings.
Apollo shares 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 Inc, KKR & Co Inc and Carlyle Group 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.
On Monday, Apollo said it would pursue a “one share, one vote” corporate governance structure that would do away with shares with special voting rights that currently give Black effective control of the firm. It said the move could qualify it for listing on the S&P Global indices.
Apollo also said it would seek to give its board more authority to oversee its business, eroding the power of its executive committee led by Black.
The board will be expanded to include four new independent directors, including Avid Partners founder Pamela Joyner and physician and scientist Siddhartha Mukherjee, Apollo said.
Apollo co-presidents Scott Kleinman and James Zelter will join the board and take on increased responsibility running day-to-day operations, the firm said.