Apollo's Black Opposes 'Micromanaging' Leverage

Mar 3 2014 | 11:59am ET

Apollo Global Management founder Leon Black doesn’t want the government telling him how much he can borrow to buy a company.

Black said he opposed a proposal by the Federal Reserve and Office of the Comptroller of the Currency that would keep banks from issuing senior debt in leveraged buyouts worth more than six times a company's cash flow.

"To have a blanket number like that is micromanaging too much from a regulatory point of view," Black told a private equity conference at Columbia Business School last week. "Different industries have different rates of growth."

The Fed and OCC in September began to warn banks that high-risk loan performance would play a big role in the "stress tests" that determine whether a bank has a sufficient capital ratio. The regulators said that their annual review of leveraged loans found 42% had a deficiency that could lead to a loss.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note