The Pennsylvania Public School Employees' Retirement System says it will pause new investments to Apollo Global Management amid concerns of its CEO and founder Leon Black's ties to the late disgraced financier Jeffrey Epstein.
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The pension fund told FOX Business that the decision was made after a discussion with the investment firm following a New York Times report alleging as much as $75 million in payments from Black to Epstein, who was convicted in 2008 for soliciting sex from a minor.
"After that October 13 phone conversation, PSERS’ Investment team informed Apollo that it will not consider any new investments at this time," a PSERS spokesperson said.
A source close to Apollo told FOX Business that PSERS has invested less than $1 billion over the lifetime of its relationship with the private equity group. Apollo manages $414 billion in assets for investors that include many of the world’s largest pensions and sovereign wealth funds.
The investment freeze by PSERS comes after Apollo announced in an 8K filing that law firm Dechert LLP would be conducting a "thorough, independent review" of Black's relationship with Epstein.
An Apollo spokesperson told FOX Business that it is "firmly committed to transparency," and that "Leon has communicated directly with our investors on this issue and we remain in open dialogue. "
In an Oct. 12 letter to Apollo’s investors that was reviewed by the Wall Street Journal, Black said Epstein served as an adviser to him between 2012 and 2017 and that he was “completely unaware” of Mr. Epstein’s “reprehensible” conduct. “I deeply regret having had any involvement with him,” Black reportedly wrote.
The spokesperson added that Apollo "never did business with Jeffrey Epstein."
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PSERS noted it is "closely following the ongoing legal issues and the newly launched internal Apollo investigation."