For most of his years as Apollo Global Management chief executive, Leon Black worked from a sprawling Manhattan office that offered breathtaking views of Central Park.
But last week an Apollo lawyer told regulators in Nevada that if Black ever wanted to return to the investment company’s space on 57th Street, he would first have to line up with other visitors and register with building security.
The group’s public distancing from its own billionaire co-founder seemed to reassure Nevada gaming regulators who are evaluating whether Apollo is a fit and proper buyer for the Venetian casino in Las Vegas.
It also underscored how Apollo’s historical association with Black remains fraught almost a year after his departure. The Wall Street powerhouse with nearly $500bn under management is expected to report strong profits in its 2021 financial results on Friday.
Black stepped down from Apollo following an internal investigation that revealed he had paid the late paedophile Jeffrey Epstein $158mn for personal financial advice. Yet he remains Apollo’s largest individual shareholder with a 12 per cent stake in the company whose market capitalisation is $40bn.
Black is also in a legal battle with fellow Apollo co-founder Josh Harris, who remains on the company’s board and holds a 7 per cent stake. Last month Black filed a lawsuit against Harris claiming he was so upset to lose out on the top job at the group that he masterminded a smear campaign in 2021 to “destroy” his former boss.
Black says a key actor in the alleged plot is his former mistress Guzel Ganieva, who sued the billionaire in June claiming he had raped her and then damaged her reputation by publicly accusing her of extortion.
Harris has vigorously denied the allegations. Apollo said in a statement at the time that the dispute between Black and Harris was private, and that the group was not involved.
“Black-related headline issues may be inching toward the front burner,” said Finian O’Shea, an analyst at Wells Fargo who has supported Apollo’s new emphasis on credit investing after a recent merger with its life insurance affiliate Athene.
Both Black and Harris have the right to be nominated to serve on Apollo’s board under the terms of a stockholder’s agreement that they — along with co-founder and new chief executive Marc Rowan — entered into on January 1. The right will be in force so long as their shareholdings remain above a set threshold.
The agreement entitles all three men to office space and administrative support if they remain active in the business, along with “customary information rights”.
Apollo has said publicly that Black will not nominate himself for a board seat. Black may choose to designate a nominee on his behalf, according to a person familiar with his thinking.
Black’s association with Apollo was “the elephant in the room”, Brin Gibson, chair of the Nevada Gaming Control Board, told a February 2 meeting that had been called to evaluate the group’s proposed multibillion-dollar acquisition of the Venetian.
One gaming control board member added that the board did not want Black involved in the deal “to protect the reputation of the state”.
“We can confirm very clearly that Mr Black will not be interfering or giving any input that has any sort of impact on what Sambur will be doing,” said an Apollo representative, referring to David Sambur, an Apollo executive with responsibility for the Venetian investment.
“He [Black] doesn’t have an email address, he doesn’t have a phone number, no office,” the Apollo representative added, insisting that Black had fully exited the firm.
A representative for Black declined to comment.
Apollo’s shares have risen 43 per cent since the start of 2021 — well ahead of the S&P 500 stock index but sharply trailing rivals Blackstone, KKR and Carlyle Group.
The company said in a statement: “The year 2021 was a record year on almost every business and financial metric: [assets under management], profitability, fundraising, employee engagement and the addition of over 400 professionals to our talented team. The firm has never been more aligned or better positioned to create value for all of our stakeholders.”
As the Athene merger transforms its business, Apollo managers have been trying to soften its reputation as a harsh workplace. Insiders say some difficult personalities have left the group. Apollo has added new independent directors and hired staff for human resources and its diversity and inclusion efforts.
“If we get culture right, we win. We can always adjust the strategy,” Rowan said at an investor event in October. “And I want to assure you, we are getting culture right.”
The group recently forecast that it would double assets under management to $1tn by 2026, with Rowan insisting this moment was the most exciting time in the history of alternative asset investing.
“Nostalgia is a very dangerous point of view in our business because, in the next five years, it’s going to change more than it has in the past 10,” Rowan said. “And we should embrace that.”
This story has been amended to clarify the attribution of statements about Black’s ability to designate a board nominee.