(Bloomberg) — For Leon Black, all of it obtained to be an excessive amount of.The person who constructed some of the ruthless money-making machines in Wall Avenue historical past unexpectedly left his Apollo World Administration Inc. on Sunday, handing over the reins to certainly one of his proteges, Marc Rowan, and a former U.S. regulator.It’s a shocking flip for the 69-year-old, who for many years ran Apollo as an extension of himself — combative, immovable and wildly profitable. However after greater than a yr of scandal surrounding his ties with convicted intercourse offender Jeffrey Epstein, which had already led to him agreeing to go away his job as chief government officer later this yr, Black severed all day-to-day ties with the agency.“The final weeks and months have been deeply making an attempt for me and my household,” Black wrote in a letter to his board. The scrutiny on his Epstein ties “have taken a toll on my well being and have precipitated me to want to take a while away from the general public highlight that comes with my every day involvement with this nice public firm.”Traders appeared to welcome his departure — a once-unthinkable consequence. Apollo’s inventory climbed as a lot as 5.6% Monday, erasing its 2021 decline. Black’s Epstein connections — he paid greater than $150 million to the financier lately — had threatened fundraising for the agency, and a few purchasers have been sad with a January announcement that Black would cede the CEO function to Rowan whereas staying on as chairman.Citigroup Inc. analysts responded to the strikes, upgrading Apollo to purchase, citing “favorable” company governance steps.“It turned clear this was actually the one possibility,” mentioned Jerry O’Hara, a Jefferies Monetary Group Inc. analyst, about Black’s exit. “The earlier that Apollo is ready to put this in its previous, the earlier they will work towards eradicating the overhang. The prior announcement mentioned he was staying on as chairman. That led some to consider there was no change in his involvement aside from title. This rubber stamps it.”Whereas Rowan has taken over as CEO, Jay Clayton was named non-executive chairman, and Apollo added two extra impartial administrators to its board, in response to a Monday assertion.“Marc has seamlessly transitioned into the CEO function and I’m assured Apollo will soar to new heights beneath his management,” Black mentioned within the assertion.Epstein LinksAfter new proof of Black’s ties to the late financier surfaced final yr, Apollo employed a legislation agency to look into the matter. The investigation discovered that Black paid Epstein $158 million between 2012 and 2017 — after Epstein pleaded responsible to felony expenses in 2008. Apollo has lengthy maintained it by no means employed Epstein for any providers, and Black was by no means accused of any involvement in his felony actions.Apollo expects to report earnings that exceed analysts’ estimates and first-quarter fundraising that’s “trending towards the excessive finish” of the agency’s annual vary of $15 billion to $20 billion, Black mentioned within the assertion.Shares of New York-based Apollo rose 4.5% Monday.The appointments of two further administrators, Richard Emerson and Kerry Murphy Healey, carry Apollo’s board to 15 members, two-thirds of them impartial. Clayton, the previous chairman of the Securities and Trade Fee, had joined Apollo as lead impartial director on March 1.Clayton, who led the SEC for many of Donald Trump’s presidency, has labored with different with high-profile companies embroiled in controversy. As a lawyer at Sullivan & Cromwell, his purchasers included Goldman Sachs Group Inc., Valeant Prescribed drugs Worldwide Inc. and Ally Monetary Inc.“This wouldn’t be the primary time somebody from the fee is available in, which alerts that the agency understands that it has gotten into lawsuits and allegations and it desires to maneuver past them and must be higher,” mentioned Donald Langevoort, a professor at Georgetown College Regulation Middle. “I don’t assume it’s simply window dressing. Any person like Jay Clayton doesn’t wish to put his status in danger.”Throughout his tenure on the SEC, Clayton, 54, made strikes that have been extensively seen as helpful to non-public markets. For instance, the regulator took steps to ease among the longstanding restrictions that restrict companies akin to Apollo, Blackstone Group Inc. and KKR & Co. from elevating cash from the tremendous wealthy, sovereign wealth funds and pension funds.Athene DealEarlier this month, Apollo introduced an $11 billion deal to amass the remaining stake of insurer Athene Holding Ltd. that it didn’t personal. The agency additionally mentioned on the time it will convert to a full C-corp, with a one-share, one-vote construction. That day, throughout a convention name with analysts, Black was conspicuously absent. The Rowan period had already begun.Learn extra: Apollo’s Rowan Makes Imprint Felt With $11 Billion Athene DealRowan, 58, was thought of considerably of an underdog. Whereas he was the mastermind behind a few of Apollo’s most worthwhile wagers, together with Athene, he was typically within the background. He’s thought of extra staid than fellow co-founder Josh Harris, who was seen as having a more in-depth relationship with Black and deemed to be a extra possible successor.All through his profession, Black earned a status for overcoming disasters.He based Apollo in 1990 with companions from Drexel Burnham Lambert, the junk-bond store led by Michael Milken that collapsed in a scandal. Following the 2008 monetary disaster, Apollo got here up with methods to guard its investments even when among the corporations it backed failed.See additionally: Apollo Traders Are Left Ready for Outcomes of Epstein ProbeBut Black’s ties with Epstein introduced unprecedented scrutiny upon the agency, unsettling purchasers and shareholders. Some public pension plans halted their commitments.Now could be “the best second to step again and concentrate on my household, my spouse Debra’s and my well being points, and my many different pursuits,” Black mentioned Monday. “I intend to stay Apollo’s largest shareholder, and strongest supporter.”For extra articles like this, please go to us at bloomberg.comSubscribe now to remain forward with probably the most trusted enterprise information supply.©2021 Bloomberg L.P.