He’s a billionaire and one of the most powerful investors on Wall Street. Leon Black is the CEO, chairman of the board and co-founder of private equity firm Apollo Global Management, which manages close to half a billion dollars of the Oregon Public Employee Retirement System (PERS) fund.
Black is also a longtime associate of convicted child pedophile Jeffrey Epstein, paying him millions of dollars every year from 2012 to 2017 in consulting fees, four years after Epstein was convicted of soliciting sex from a minor in 2008. Black made these admissions on Apollo’s most recent earnings call — a quarterly call where publicly traded companies answer questions from analysts and investors — the morning of Oct 29.
Apollo manages $433 billion in assets, according to the call, with 23 percent of that from public pension funds. According to Oregon State Treasury (OST) spokesperson Rachel Wray, the Oregon PERS fund has $448.5 million invested as of June 30.
On Oct. 20, Black asked the Apollo board of directors’ independent three-person “conflicts committee” to hire outside counsel to review his relationship with Epstein, according to an 8-K Securities and Exchange Commission filing from Oct. 26. Companies must file an 8-K to the SEC when they make major announcements that shareholders should know about.
Black assured investors on the earnings call that his relationship with Epstein was purely professional and that Epstein helped advise him on estate planning, tax structuring of art entities and philanthropic advice.
“I believe it will assure all of our stakeholders that they have the relevant facts and demonstrate that everything I have said about my relationship with Epstein is accurate and truthful,” Black said in the call.
The independent review may have come too late for some investors like the Pennsylvania Public School Employees Retirement System, which told Apollo it would not be making any new investments with the firm, according to the Financial Times. The Pennsylvania PSERS fund had just under $1 billion invested in Apollo.
The CalPERS fund, California’s equivalent to Oregon’s PERS fund, and the Teacher Retirement System of Texas have contacted Apollo about Black’s ties to Epstein but not yet taken action with their investments or announced plans for future investments.
A public record request for communications between OST, the state agency in charge of investing the Oregon PERS fund, and Apollo about their future relationship was fully denied. Funds invested in Apollo are privately held, making any records other than the address of the equity firm or the dollar amount of the investment exempt from the Oregon public records law under ORS 192.355(14), according to the OST records office.
Wray from OST said in an email to Eugene Weekly, “We don’t really get into specifics about our investments, but I can say that like any institutional investor, we evaluate all factors that influence or could affect those investments.”
When asked specifically again about OST’s future relationship with Apollo and whether there have been conversations between the state agency and the investment group in light of the financial link between its CEO and a man charged with sex trafficking, Wray reiterated the same point verbatim.
The Oregon PERS fund was worth $77.7 billion as of Aug. 30 of this year, according to the Oct. 2 PERS board meeting packet. The fund made $42.9 billion in public and private equity investments and $8 billion in alternative investments — the category a fund like Apollo would fall under.
Black and Epstein met in 1996, Black said during the recent earnings call, but he has faced questions about his relationship with Epstein from investors since the death of the convicted sex offender in August 2019. The questions began to heat up when a New York Times investigation from mid-October of this year revealed that Black had paid Epstein $50 million of his fortune over the span of six years.
Despite the negative press for Black and Apollo and a few investors pulling away from future investments, Apollo co-founder Josh Harris and Co-President Scott Kleinman said on the Oct. 29 call that investments haven’t slowed down and their teams are still very busy.