The investor who rewired Wall Street

Leon Black may not be a household name, but he quietly built one of the most powerful private equity firms in the world. As the co-founder of Apollo Global Management he created his fortune buying distressed debt and complex assets that others ignored.

While most investors looked for stable returns, Black focused on complexity and risk. Today Apollo manages over $650 billion and has become one of the most aggressive and influential firms on Wall Street.

This week we explore how Leon Black built Apollo, how he profited during downturns, and why his strategy changed the playbook for private equity:

• 🏛️ Lessons from Wall Street’s Wild Years

• 📚 Building Apollo from bankruptcy fallout

• 🧠 The Epstein scandal that ended him

— Investor Briefcase Team

Leon Black began his career at Drexel Burnham Lambert, the controversial investment bank that led the junk bond boom of the 1980s. At Drexel, he worked under Michael Milken, the financier who helped popularize high-yield debt as a tool for leveraged buyouts.

Black was quick to rise the ranks and eventually ran the firm’s mergers and acquisitions group. He played an important role in some of the most aggressive deals of the era, including the takeover of Revlon.

That came to an end in 1990 when federal prosecutors charged Milken with securities fraud. Drexel collapsed under regulatory pressure and filed for bankruptcy. Black was never accused of any wrongdoing, but his career was suddenly at a crossroads.

With few investors willing to touch high-yield debt, Black saw an opportunity. That same year, he launched Apollo Global Management with a strategy focused on buying distressed assets at deep discounts.

Apollo started by focusing on companies that traditional firms avoided. Where others saw too much debt or too much complexity, Black saw mispriced risk. Rather than trying to quickly flip assets, Apollo aimed to take control, restructure operations, and drive long-term returns. By targeting the most complex and risky opportunities, Apollo often acquired companies for a fraction of their value.

It was a different style of private equity. Firms like KKR and Blackstone were raising huge funds and bidding on trophy assets. Apollo, in contrast, was buying the debt of struggling companies with a financial model that was high-risk, but also high-reward.

Over the next two decades, the firm began buying entire companies, investing in insurance, and building out a credit platform that lent to middle-market borrowers when banks pulled back. By 2008, Apollo had become one of the largest alternative asset managers in the world.

One of their most successful deals came from their 2008 acquisition of LyondellBasell, a chemical company emerging from bankruptcy. Apollo’s investment returned over $9 billion, one of the highest returns in the firm’s history. That same year, as other firms pulled back during the financial crisis, Apollo leaned in.

Apollo’s returns during the post-crisis years were among the strongest in private equity. The firm delivered a 30 percent internal rate of return on its flagship fund in 2008. As a result, investors were pouring fresh capital into the firms fund while other private equity firms struggled in the market downturn.

Leon Black’s tenure as CEO of Apollo came to an end in 2021 following scrutiny over his personal ties to Jeffrey Epstein. 

While Black admitted to paying Epstein over $150 million for tax and estate planning services between 2012 and 2017, he denied any involvement in Epstein’s criminal activities. An internal review by Apollo’s board found no wrongdoing related to the firm’s operations, but the reputational fallout was significant.

Facing mounting pressure from investors and board members, Black stepped down as CEO and later resigned as chairman. Marc Rowan, one of Apollo’s other co-founders, succeeded him as CEO and began shifting the firm toward more conservative and long-duration strategies.

Black has since kept a lower public profile, though his wealth and influence remain substantial. According to Forbes, his net worth exceeds $10 billion, much of it tied to Apollo’s success.

The Epstein ties have cast a shadow over an otherwise extraordinary career in private equity. Leon Black helped build one of the most successful alternative asset managers in the world, but it is unclear if he will ever have the same involvement as he once did.

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Other private equity investors

> Marc Rowan (Apollo Global Management): Co-founder and current CEO of Apollo, Rowan transformed the firm into a $700 billion asset manager, steering it towards private credit and insurance-backed lending.

> David Rubenstein (The Carlyle Group): Co-founder of Carlyle, Rubenstein built one of the world’s largest private equity firms with a focus on government-related investments.

> Henry Kravis (KKR & Co.): Pioneer of the leveraged buyout, Kravis co-founded KKR, executing landmark deals like the RJR Nabisco acquisition. His approach set industry standards for large-scale buyouts.

> Jeffrey Epstein (Pedophile): Though not a traditional private equity investor, Epstein provided financial services to high-net-worth individuals, including Apollo’s Leon Black.

Each week we profile the most notorious investment stories.

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