Buyout firm considering IPO

Leon Black, founder of Apollo Management, said executives of the New York-based buyout firm were examining whether to sell shares to the public, a step being taken by rival Blackstone Group.

“We’re looking at this, as is every other private equity fund,” Black, 55, said Tuesday during a panel discussion at the Milken Institute Global Conference in Beverly Hills. Any setback to equity markets, trading at record highs, would probably come from a geopolitical crisis, he said.

Apollo is also considering the private sale of shares, which would raise capital while avoiding the scrutiny that comes with an initial public offering, people familiar with the talks said earlier this month. A private placement wouldn’t preclude an IPO, and would allow Apollo to gauge the success of Blackstone’s offering before going ahead with its own, they said.

The biggest plus of an IPO is having shares to pay for acquisitions, Black said. “A real minus” is having to comply with the Sarbanes-Oxley corporate governance law and “being under that microscope” of investors, he said, adding, “When you go public, clients don’t feel you lost their money. They feel like you stole their money.”

Buyout firms have raised more than $220 billion since the start of 2006, prompting industry executives such as Black to consider IPOs as they plan for succession.

Blackstone said in March that it might go public.

At the Milken conference, Black described himself as “generally a glass-half-empty person,” and said he expected investment returns to decline as buyout firms “throw” money at deals. Still, Black is optimistic about the economy, saying it’s not “about to fall over a cliff.”