Leon Black has always had a knack for finding a profitable transaction. Jeffrey Epstein, who died in 2019, helped Mr Black save more than $1bn in personal tax liability. In return, the co-founder of Apollo, the US private equity group, paid the financial adviser and convicted paedophile $158m between 2012 and 2017.

Mr Black’s decision to step down as chief executive shows how much the wider balance of advantage has shifted since. Investors are now not just concerned about achieving high returns, but also the personal conduct of those that they entrust with their money.

After Mr Epstein was arrested on sex trafficking charges in 2019, Mr Black’s ties to him became an albatross around Apollo’s neck. In recent months, limited partners, including large state pension schemes, pondered whether to go on investing.

On Monday, Apollo’s independent directors released a report that detailed Mr Black’s decades-long association with Mr Epstein. This cleared the private equity pioneer of wrongdoing. Mr Black has good financial reasons to step back — while staying on as chairman — as part of a package of reforms intended to soothe fellow investors. He remains Apollo’s largest shareholder with a near quarter stake.

While Apollo’s shares have languished, rivals Blackstone and KKR have seen their stock soar by 16 per cent and 38 per cent since the start of 2020. This, even as Apollo’s assets under management grew from $331bn to $433bn in the first three quarters of the year.

A majority of Apollo’s asset base comes from so-called “permanent capital”: that constantly replenishes and does not require traditional private equity-style fundraising. Most of this comes from insurance premiums deployed into senior loans rather than risky buyout equity. The strategy is so formidable Apollo has promised 2021 revenue growth would still approach 10 per cent even if it did not raise a single external dollar. The mastermind of this effort, co-founder Marc Rowan, assumes the CEO role.

Apollo is now trying to bring its beleaguered shares in line with its buoyant prospects. Greater accountability is the key here. Independent shareholders will get a bigger say. Apollo will now collapse its dual class share structure into a one share/one vote scheme, adding extra independent directors.

The interests of backers — and other stakeholders — have often been underserved by private equity. If these remain unhappy, Apollo and Mr Black have wisely left themselves leeway to go further.

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