|Bid||41.10 x 800|
|Ask||41.05 x 800|
|Day's Range||40.22 - 41.20|
|52 Week Range||19.46 - 55.39|
|Beta (5Y Monthly)||1.52|
|PE Ratio (TTM)||N/A|
|Earnings Date||Oct 29, 2020|
|Forward Dividend & Yield||1.96 (4.82%)|
|Ex-Dividend Date||Aug 17, 2020|
|1y Target Est||52.71|
A leveraged buyout refers to the acquisition or takeover of a company where a significant amount of money is borrowed to meet the acquisition cost. Leveraged buyouts, popularly known as LBOs, are commonly carried out by private equity firms.
(Bloomberg) -- It keeps getting worse for Leon Black.Over the past week, Black’s giant investment firm, Apollo Global Management Inc., has confronted one question after another about his decades-long relationship with convicted sex offender Jeffrey Epstein.First, his own board ordered an external review prompted by Black himself. Then a Pennsylvania pension fund paused new investments -- and the state of Connecticut has done the same. One major consultant -- a gatekeeper to $160 billion of investor commitments -- has urged clients to hold off, and another is considering taking similar action.Clients who for years enjoyed some of the best returns on Wall Street are reconsidering their ties to Apollo amid renewed scrutiny over Epstein, spurred by a New York Times report earlier this month and given fresh attention from an unsealed deposition of Epstein associate Ghislaine Maxwell.Investors distancing themselves from the firm show how serious the issue has become for Black and his general partners. Some clients aren’t convinced that the review, which will be handled by law firm Dechert LLP, will be enough to clear Black’s name, according to people familiar with the matter.A freeze in new money could hurt Apollo at a time when it’s trying to raise $20 billion for several new funds. The pandemic-spurred turmoil in the credit markets is a prime investing opportunity for the firm, which is known for buying struggling businesses. Apollo is seeking to take advantage of market dislocations as well as invest in private debt, people with knowledge of the matter said in April.Black’s growing troubles reflect the changing politics of the investing world, where major funds have become more sensitive to environmental, social and governance matters. The new focus means that even the prospect of lucrative returns may not be enough of a lure in the midst of a scandal.“While performance is always going to be an important factor, increasingly it’s not the only factor,” said Gerald O’Hara, an analyst at Jefferies Financial Group Inc. “In some respects, there’s some willingness to sacrifice performance for a company that’s run with good governance, good ethics.”Investment adviser Aksia told clients not to give new money to Apollo, Bloomberg reported Friday, while Connecticut said it is halting new investments with the firm. Earlier in the week, the Pennsylvania Public School Employees’ Retirement System said it would stop making additional investments in Apollo for now, and consultant Cambridge Associates is considering not recommending the firm to its pension and endowment clients.While Black faced pressure in the immediate aftermath of Epstein’s arrest last year, investor angst was rekindled by a New York Times report that he had wired at least $50 million to Epstein after his 2008 conviction for soliciting prostitution from a teenage girl. The article didn’t accuse Black of breaking the law. Apollo shares have fallen about 12% since the story was published on Oct. 12.“We are firmly committed to transparency,” Apollo said Friday in a statement, noting that Black has been communicating regularly with investors. “Although Apollo never did business with Jeffrey Epstein, Leon has requested an independent, outside review regarding his previous professional relationship with Mr. Epstein.”In a letter to Apollo’s limited partners this month, Black said he deeply regretted having had any involvement with Epstein. Black said he had turned to him for matters such as taxes, estate planning and philanthropy, and that nothing in the Times’ report was inconsistent with an earlier description of their ties.Read more: Leon Black’s Epstein Links Threaten Apollo’s FundraisingIt will be tough for investors to cut ties completely with Apollo as private equity funds typically lock up capital for years -- a trade-off many are willing to make with the promise of high-flying returns. And unless the inquiry unearths something more damning, clients may ultimately decide to look the other way, said three investors who asked not to be identified.It’s particularly unappealing for clients to pull away given the firm’s stellar returns. Apollo’s flagship private equity fund, which opened to investors in 2001, has delivered annual gains of 44%, Bloomberg reported in January.But even yield-starved investors looking to pump more money into private equity may choose to go elsewhere in future, as rivals flood the market with new offerings.“It’s a very competitive race for capital and one thing that we continue to see in fundraising is it is in many ways more similar to a political process than a capital-raising process,” said Sarah Sandstrom, partner at Campbell Lutyens, which helps private equity firms raise money. “You are telling your story, creating relationships with investors.”(Adds previous comment from Black in 12th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Apollo Global Management Inc. is facing a client revolt that could choke new investments into its funds, as questions persist about co-founder Leon Black’s ties to convicted sex offender Jeffrey Epstein.Cambridge Associates, an influential consultant to investors including pensions and endowments, may stop recommending Apollo, according to people with knowledge of the matter. Already, the Pennsylvania Public School Employees’ Retirement System has informed Apollo it won’t consider additional investments for now.The developments follow months of pressure on Apollo from investors seeking more definitive answers about what Chief Executive Officer Black has described as professional ties to Epstein, who was awaiting trial on sex-trafficking charges involving underage girls when he was found dead in jail last year. Interest in their relationship heightened anew last week when the New York Times reported Black had wired at least $50 million to Epstein after his 2008 conviction for soliciting prostitution from a teenage girl.Black and Apollo are now trying to dispel the cloud over the company, which depends on multibillion-dollar fundraisings to fuel its earnings and has already seen its stock take a hit. At Black’s urging this week, a panel of board members hired law firm Dechert LLP to independently examine the 69-year-old’s account of his ties to Epstein, whom Black has said he turned to for financial matters, such as taxes, estate planning and philanthropy.“Leon requested and welcomes the third-party, independent review,” a spokesperson for Black said in an emailed statement Wednesday. He “is confident that the outcome will put the matter behind Apollo in validating what he has previously communicated publicly.”Apollo is “firmly committed to transparency,” a company spokesperson said in an email. “Leon has communicated directly with our investors on this issue and we remain in open dialogue.”There’s been no allegation that Black’s dealings with Epstein broke the law. Representatives for Apollo have repeatedly said Epstein never did business with the firm. Still, the worry among shareholders is that clients may halt inflows of new money.“Anything they can do that involves outside observers to nip that narrative in the bud in my view will be great for the stock,” said Patrick Davitt, an analyst at Autonomous Research. “I am kind of wondering why they didn’t do this in the first place. This could have gotten the monkey off their back a long time ago.”The Pennsylvania retirement system said it had planned to have a meeting with Apollo sometime this week, but after the Times published its story on Oct. 12, the pension plan held the meeting by phone the next day. It later suspended new investments. “PSERS is closely following the ongoing legal issues and the newly launched internal Apollo investigation,” it said in a statement without elaborating on its concerns. The Financial Times earlier reported the decision. Cambridge, which advises on about $410 billion in assets, told clients its deliberations were prompted by lingering questions over Black and Epstein’s ties. A representative for the firm declined to comment.Some other investors, speaking on the condition they not be named, said they didn’t understand what financial services could warrant $50 million in payments to Epstein. A college dropout, he lacked conventional training in areas such as taxes and estate planning.Apollo’s stock slumped in the wake of the newspaper’s report, shedding 14% by Tuesday. It jumped as much as 6.3% on Wednesday after the firm disclosed the board’s review. The shares ended the day up 2.6%, and are down 13.5% in 2020.Clients’ FrustrationsPension systems, often more exposed to political pressures, are known to be repelled by negative news involving their investment partners. Some have been raising concerns with Apollo for more than a year over the headlines generated by Black and Epstein’s relationship, according to people with knowledge of those talks.Two investors said they pressed Apollo for more information about their ties but were disappointed with the lack of detail. The firm’s representatives tried to assure some clients by suggesting journalists digging into the situation would already have found wrongdoing if any occurred. Representatives also noted Black wasn’t the only one who had done business with Epstein. Some clients said they were offered the possibility of questioning Black directly.Gerald O’Hara, an analyst at Jefferies Group covering Apollo’s stock, said he’s been fielding calls from investors nervous that the situation at Apollo could spiral further. But even then, private equity fund clients typically agree to have their money locked up for years. The risk isn’t to existing funds, it’s to Apollo’s ability to attract new money.“This could certainly have an impact on future fundraising rounds,” O’Hara said. Bloomberg reported in April that the firm aimed to eventually raise $20 billion across several new funds to take advantage of dislocations in credit markets as well as private debt.Black’s RegretsThe two men had been acquaintances since at least the early 1990s. From time to time, Epstein met with Black at Apollo’s New York offices, and he pitched personal tax strategies to the firm’s executives, Bloomberg has reported.Apollo conducted an internal review into its involvement with Epstein to ensure that any ties went no further than the firm’s co-founder, people with knowledge of the matter said last year. That included examining emails and records to determine there was no connection between the company and Epstein, one of the people said.“With the benefit of hindsight -- and knowing everything that has come to light about Mr. Epstein’s despicable conduct more than 15 years ago -- I deeply regret having had any involvement with him,” Black said in a letter to Apollo’s limited partners dated last week.(Updates with share price moves in 12th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.