Apollo Global Management Inc.'s top executives reiterated Oct. 29 that the firm did not do business with Jeffrey Epstein but acknowledged that Chairman and CEO Leon Black's business relationship with the financier and registered sex offender could cut into fundraising.
Apollo's conflicts committee hired law firm Dechert LLP and is currently conducting a review of Mr. Black's relationship with Mr. Epstein.
Firm executives expect fundraising to slow as investors wait for the findings of an independent review, co-founder Josh Harris said Oct. 29 on a conference call to discuss the company's earnings release. He said that the conflicts committee review is "an important step."
He said that Apollo has "long and durable relationships" with its clients and they are awaiting the results of the review.
Right now, Apollo is focused on its investment strategies, Mr. Harris said.
Some investors are already taking action and have suspended future investments with the firm.
The $59 billion Pennsylvania Public School Employees' Retirement System, Harrisburg, and the $36 billion Connecticut Retirement Plans & Trust Funds, Hartford, each said they will not consider new investments with Apollo.
PennPSERS spokesman Steve Esack said in an email that the pension system made the decision after speaking with the firm "about the ongoing legal investigations involving the late Jeffrey Epstein and his past personal financial relationship with Apollo founder Leon Black."
The "investment team informed Apollo that it will not consider any new investments at this time," Mr. Esack wrote, adding that PennPSERS "is closely following the ongoing legal issues and the newly launched internal Apollo investigation."
PennPSERS currently has $918 million committed to Apollo funds.
Gabrielle Farrell, spokeswoman for Shawn T. Wooden, Connecticut treasurer and principal fiduciary of the pension plan, said in an email: "We reviewed Apollo this spring and determined, based on a variety of due diligence criteria, they did not meet our standards for making a new capital commitment."
Although Mr. Black's connection to Mr. Epstein was not cited as the reason for not committing additional capital to Apollo, Ms. Farrell wrote that Connecticut considers "multiple factors when deciding whether or not to commit to private market funds," with an investment firm's "legal issues" being among the factors under consideration.
The CRPTF currently has a total of $250 million committed to two Apollo funds.