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A fight between the billionaire founders of Apollo is one of his

(Bloomberg) – Three months after Josh Harris failed to win Leon Black’s crown atop a $ 455 billion investment giant, Black’s chosen heir is in charge – and Harris is on the run . The billionaire co-founders of Global Management Inc. keep brewing, with ramifications for investors as the company reconfigures its governance this year. Publicly, Harris approved the decision to elevate co-founder Marc Rowan to the role of chief executive. Privately, he is sidelined, even though he remains a “key man” in Apollo’s flagship fund – meaning investments could stagnate without him. – daily management of operations. He is less involved in the trade than before, with the underlyings generally only asking for his approval for the most important trades. Outside of Apollo, he was looking for a house in Florida that could eventually serve as his primary residence, which would lower his tax bill if he started to tap into the wealth he amassed in the business. For three decades, he’s been known to work marathon hours and make his presence known throughout the New York-based private equity firm, directing operations and squeezing employees on the details of their transactions. His lesser involvement came with a sense of relief for some. When the topic came up recently, Harris employees were heard humming their response, “Ding-Dong! The Witch is Dead ”from“ The Wizard of Oz ”. Insiders are privately predicting that Harris will officially play a more limited role, or even leave, in the coming year, devoting more time to outside business interests, including a professional sports stable. A spokesperson for Harris declined to comment for this article, referring to a statement released by Harris in January, when Apollo announced plans to appoint Rowan, 58, as CEO. Harris said he would help broaden the search for returns for investors, grow the company’s platform and continue to work with limited partners and investors. An Apollo representative said he didn’t There had been no change in the roles and responsibilities described at the time. successful companies are trying to transfer the power from founding CEOs to new teams, in the hope of not alarming investors concerned about sustaining historic returns. It’s a process that has proven cumbersome, as the ambitions of the leaders derail efforts to replicate the original chemistry. At Carlyle Group Inc., for example, an attempt to hand the reins over to co-heads Kewsong Lee and Glenn Youngkin ended in Lee’s sole takeover last year and Youngkin’s demise – who ultimately ran for office. the governorship of Virginia. Read more: Carlyle’s co-CEO’s abrupt exit ends a long and awkward power struggle, but at the famed Apollo with his bare hands, the process has been all the more swift and tumultuous. Black, long synonymous with his public image, has come under increasing scrutiny until 2020 over his private business dealings with Jeffrey Epstein, the notorious sex offender who committed suicide in prison. In January, a board review found that Black paid Epstein $ 158 million for services including tax advice and estate planning. become CEO. As Black’s review wrapped up, Harris privately voiced concerns about the reputational toll Epstein news might have on Apollo and advocated that Black step down as CEO. But Black surprised insiders in January by persuading Rowan to take the job, just months after Rowan announced he was going on “semi-sabbatical.” Rowan has since tightened his grip, taking over in March when Black, 69, accelerated the transfer. , citing health concerns.Read More: Black Picks Successor Because Epstein’s Ties Cost Him CEO Role Reducing Harris’ role is far from straightforward. He is listed as a key man alongside Black and Rowan for the record $ 24.7 billion fund raised in 2017. The loss of two of them could potentially prevent the vehicle from making further investments until then. that customers approve. This status, insiders acknowledge, gives Harris influence in deciding what role he will continue to play in the company, but on other fronts he is losing ground. Harris is still a member of the executive committee, to which the board has delegated certain powers. At the end of January, Black announced his intention to eliminate the panel. The company said it would improve governance by reshaping the board of directors – where Harris has a seat – so that two-thirds of its members are independent. on strategy, the dealmakers involve it less when organizing transactions, according to people. Since he transferred control of the company’s budget, his role in compensation decisions has also diminished, in addition to influencing the most important issues, people said. In recent months, Apollo has took the initiative to update his management biography on his website, removing a significant line: Harris “now runs the day-to-day operations of the company.” House HuntingHarris graduated from the Wharton School at the University of Pennsylvania in 1986, two years behind Rowan. They quickly ended up working as dealmakers at Drexel Burnham Lambert. When the junk bond powerhouse collapsed in scandal, Black brought in the couple to found Apollo along with a few others in 1990. Over the decades, Harris has been instrumental in some of Apollo’s most successful bets. In 2008, he led a $ 2 billion investment in bankrupt Dutch chemicals maker LyondellBasell Industries, on which Apollo ultimately reaped a windfall by restructuring the company. The Bloomberg Billionaires Index estimates his wealth at $ 6.6 billion. Part of that is in Harris ‘family office, HRS Management, which pumped money into health clubs and a Spanish airline, and helped manage Harris’ holdings in sports teams. Harris Blitzer Sports & Entertainment, set up with David Blitzer of Blackstone Group Inc., has stakes in the Philadelphia 76ers, New Jersey Devils and English football club Crystal Palace, but most of his fortune is still tied to the actions of Apollo and Harris and his family, who live in New York City, have been renting a house in South Florida since Covid-19 infections worsened in the second half of last year, people close to them say folder. He considered moving his primary residence there and seeing properties, people said. Apollo also considered opening additional offices in Miami and West Palm Beach. But for Harris, establishing a residence in a state without income tax would save him a lot of money if he began to loosen his financial ties with Apollo. most trusted source of business information. © 2021 Bloomberg LP



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