Two days ago, when reporting that one of the largest investors in private equity giant Apollo – the Pennsylvania Public School Employees’ Retirement System – halted all new capital commitment over co-founder Leon Black’s ties to Jeffrey Epstein, we said that “now that the pension fund has made a “virtue signaling” example, other investors will promptly follow suit.”

This was confirmed just hours later, when Bloomberg reported that another investment advisor, Cambridge Associates, was considering not recommending Apollo funds.

And now, a third Apollo client, Aksia, which advises on more than $160 billion of investor commitments, told clients to not give new money to Apollo  in the latest sign of “the investor revolt facing the money manager.” To contain the fallout, Apollo earlier this week said it was hiring law firm Dechert to investigate the relationship.

Aksia, which advises pensions, endowments and other large institutions, has begun communicating the move to its clients, with Bloomberg reporting that the reason for the move were “lingering questions over Apollo co-founder Leon Black’s relationship with disgraced financier Jeffrey Epstein.”

“Aksia believes it is prudent to delay any new commitments or investments with Apollo funds until the result of Dechert’s study are disclosed,” Aksia told clients. “Should Dechert’s review uncover that Mr. Black had knowledge of or participated in any illegal activity, investors that recently committed new capital to an Apollo fund could be subject to intense scrutiny.”
 

The growing funding freezes were sparked by a NYT report that the Apollo chief had wired more than $50 million to Epstein in the years following his 2008 conviction for soliciting prostitution from a teenage girl. Black, 69, has said he did nothing wrong and claims he turned to Epstein for financial matters, such as taxes, estate planning and philanthropy. As a reminder, this is a man who is surrounded 24/7 by some of the smartest tax experts and estate planners who also happen to work for him.

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Black and Epstein were friend since at least the early 1990s, Bloomberg has reported, and 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.” One can only imagine just much scarier their tax returns would be compared to those of Donald Trump.

Apollo said earlier this week that Dechert will conduct a review to independently evaluate Black’s past descriptions of a professional relationship with Epstein.

Oddly, the review comes after the private equity giant already 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. Naturally, it found nothing wrong.

Via Zerohedge