Leon Black Leaving Apollo Global Earlier Than Expected

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. You've got Astra Zeneca. It looks like we've got another what fourth vaccine? Now, yeah, well it still lets to get a ridens use authorization, but the headline number is a good number. This is good news, right seven efficacy, as you said, so hopefully

they'll be more confidence in using it. But then you've got we just talked about it New Jersey, New York like their you know, New Jersey specifically pausing for the rollbacks of restrictions as it's watching its COVID cases once again searched to the highest in the nation. Some really concerning numbers as well. All right, so that's going on. You also have Germany doing rollbacks. I mean, there's a lot of interesting things going on that reminds you that

this is not a straight path forward. Let's get into it with a voice that we've talked to many times over the past year, Dartyman Abuse. She is CEO and co founder at Incredible Health. Her company connects hospitals with nurses and other healthcare workers, and she joins us once again on the phone in San Francisco. Dr Abuse, Nice to have you here with Tim and myself. How are you. I'm doing well, Thank you, Thank you so much for having me on the show again. Well, it's good to

have you back. We were trying to make sense of like where to start with you. So tell me what you think are the important headlines, Uh, you know across the US globally that you think our audience needs to be focusing on. So I think some a critical set

of headlines around the healthcare workers themselves. Um. And so what we've done is we've published the report recently that looks at the impact COVID nineteen her paddle on healthcare workers, specifically nurses, over the last twelve months and there's been a whole set of interesting findings. UM. The reason it's important is because these healthcare workers are the ones delivering care and taking care of COVID patients. UM. They're also

being exposed on the front lines to COVID. UH. And you know, healthcare workers are the biggest group of labor. It's the biggest labor sector in the country today. UM. And so so that's why I think it's important to highlight. UM. There's a few important findings that I want to share with the audience. UM. One is that what we've seen is that actual compensation for healthcare workers has gone up.

In the last twelve months, it's probably been seen. Healthcare workers have seen the biggest increases in compensation both salary and signing bonuses compared to any other previous time in history. And a lot of that is driven by the increased demand for them. UM. The second area that's interesting is the turnover has also increased. You know, nurses and healthcare workers are leaving the workforce in higher numbers than ever before. A lot of a lot of nurses are taking advantage

of early retirement. UM. They're also leaving due to fatigue, and stress. And then the third areas that's important is how healthcare workers are perceiving their local communities in that don't feel appreciated by their local communities because their local communities are not necessarily following COVID guidelines. There we can go ye, there some some some really mixed news in

the report. Um, let's let's let's start just with the turnover, because look, it's not surprising given what healthcare workers have had to endure over the last you know, thirteen months when it comes to the pandemic, that there could be a lot of them who are very tired. How much higher is turnover right now when it comes to nurses and what needs to be done to make sure that

this doesn't continue. So chief nursing officers in chief HR officers of them report that the turnover has increased, and it's increased by about five Now keep in mind nurse turnover already was around even before the pandemics, so now it's gone up to about um the key drivers of that are are exactly what you state is the fatigue, the anxiety to stress that comes from coping with the pandemic and and being exposed to COVID. UH and then the other areas just you know, just nurses taking advantage

of of the options they have, including things like early retirement. Hey, one thing I want to ask you, um Dr Appoise, is that what you talk about is turnover, and there's a fairly high turnover as you just mentioned with nurses, but we're seeing more of it because of the past year. Are you concerned because of turnover or burnout? That especially? I go back to the headline, Tim and I talked about where you know, New Jersey is now seeing their case counts surge to the highest in the nation, and

there are hot spots once again around the country. You know, we've had a lot of conversations with with heads of the Atlantic Health System, with Northwill Health, the CEO joined us, and they constantly talked about this plateau ng of numbers that we're not going down. So I do want under are you concerned at all about us not having the support staff, the nursing staff that if we get another spike that could be problematic. Yeah, we we are concerned

about that. And that's been you know, every time a new search happens, the staffing situation and the hiring situation becomes more more challenging because each time there's a surge, there's a set of people who there's a set of healthcare workers that permanently leave the workforce. And I'm wondering, are you setting up for another surge? Because I what I love about talking to you mine is that you are seeing what's going on around the country and kind

of a bigger picture. And I'm wondering. There's a lot of optimism. It's spring here in New York, and people feel like things are starting to open up again, but I feel like again, step forward, step back, because we are still in a pandemic, and what are you seeing? How how concerned should we be about maybe another wave based on what you're seeing in the conversations you're having, Right, So we are concerned for for more surges and specific

states and specific locations UM. And the reason for that or the impact is this several reasons. One, I think we're going in the next few weeks, we're going to be running into UM Americans not wanting to take the vaccine.

And by the way, that includes the nurses. Our study does show that thirty nurses have chosen not to take the vaccine because they're not they don't feel that they you know, they just chosen not to UM the other and then the second areas and the second area of concern is the new variants, the new COVID variants, and and and how how much more UH spread that they'll

be spreading more UM. That's the other area of concern right expect we've all talked about that, like how many vaccines do we how much of the population do we need to see? What percentage vaccinating in order to get ahead of those variants. Dr Abuside, you referred to vaccine hesitancy among healthcare workers that that you're finding at Incredible Health.

Give us the statistic, because Carol and I talked last week about a Washington Post poll that found that more more than four intent healthcare workers have not been vaccinated. Why are you seeing it at Incredible Health. Yeah, so what we're what we've discovered in our study that nurses are saying they don't plan to take the vaccine at all at all, even when one becomes available to them.

The healthcare workers were first in line, so effectively they're they all have for the most part, access to the vaccine. I think the skepticism UM and this hesitation is mostly driven by disinformation honestly, UM, A lot of that's being driven by social media disinformation. UH rumors and myths like the vaccine is going to change your DNA and kind of think things like that that are just completely false,

UM or honestly to blame. It is a bit shocking to see healthcare workers UH kind of fall for this, for this disinformation. But regardless that that, that just highlights the need for uh, much better and much clearer public health communication about how how the vaccines work, UM, what what the risks are, and what the risk or not

and really clarifying that UM as a whole. And I think it's the hospitals and health system the employers that are responsible for this communication as well as you know, our government's both federal, state, and local governments and really communicating the safety of the vaccine as well as the purpose of it. So what could hospitals be doing better to do this and what could governments be doing better to communicate this? Because this is really surprising to me.

Medicine is evidence based, it's science based, and these health care professionals are not following the science. You're right, it is. It is really surprising. I think what's what's going to be required is like a cohesive and clear campaign communication campaign honestly about about the science. I mean, look, it's been challenging for all of us, including the health care workers, because the science it does change from week to weeks.

The CDC guidelines do change months to months. Um, you know, because this is an evolving situation, and scientists are learning more and more about the pandemic, and more research papers are getting published and so on. Right, so it's not it's not surprising. I guess that we're kind of that we you know, that that the entire groups that people

may be out of date. I think it just shows that you really need to have a consistent, clear, frequent campaign campaigns and communication on on what the correct messaging is. You know. It's interesting and I was looking for numbers. I was at the m A website by trying to get an idea of how many doctors have actually taken the vaccine. And I remember talking I can't think of the guests, but they oversee a physicians group and there was some even hesitant hesitancy among doctors early on in

terms of taking the vaccine. But I do feel like this is a crucial part of US all moving forward. Dr Abuse aide that healthcare workers in particular, you know, you would think that their front and center understanding, um, what the vaccine is about. So it's it's a little worrisome that there's some nervousness above that community. Absolutely, I mean the numbers among the general public US of Americans

are hesitant about taking the vaccine. So you know we're going to start running into this issue in a matter of weeks here, especially as as a as a supply of vaccine continues to grow in the logistics and the rollout continues. Does it mean we don't get to hurt immunity potentially? Potentially? I mean if it's not solved, is this, if not enough people take the vaccine, that's correct, that's the that's the risk that we're running. So how are

you planning for this? At incredible health? I mean, how are you planning for staffing, for availability of employees? And we'll live about thirty seconds left. Yeah, So we're we

have several initiatives in place. We're continuing our national expansion um through throughout throughout the country, UM, and we're we're we have a presence Sir teaing State we're also adding products features including a mental you know, mental health features, uh, A vibrant nurse community where nurses can support and advise each other. So we're continuing with our product roadmaps and our geographic expansion of adding more, more and more health

systness and nurses to the platform. All right, well, good to know, and I'm really great to hear about your survey. Um wheresome though some of those data points. Dr man Abus she is co founder and chief executive officer at Incredible Health, on the phone in San Francisco. Yeah, I mean, I think it's really disconcerting to have people who do deal with patients, who people who do deal with medicine and do deal with giving shots, be so concerned about

getting the vaccine and the message that sends to patients. Also, Yeah, and I do wonder and worry about the impact that man may have an in order for us to reopen up our economies and really get to that HERD immunity. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. So never having to say you're sorry, Nope, we're not talking about love story. I did see something on it over the weekend. That's

why it's in my head. A should turn my microphone on. I thought you were talking about Justin Bieber. That too. Nice. Nice stuck in my head since reading this story. So we're what we're talking about, though, is the new rule of politics. Let's get into This story is going to be featured in the upcoming issue of Bloomberg Business Week

magazine that later. This week's story already online and on the Bloomberg Let's get to Boomberg News political reporter Ryan T. Beckwith on the phone in Washington, d C. Along with Bloomberg Business We get it, or Joe Webber on the

access line in Brooklyn. Sorry not sorry, Joel. Yeah. And and this is the story that Ryan, Um when you when you kind of mentioned it in passing Um, I was like, you can go ahead and write that story, like right now, the world needs to hear and and I think you know it's really rooted in the Governor Andrew Cuomo's um recent tribulence, but it's even bigger than that. Um. So Ryan, to walk us through the art of the

apology or lack thereof in politics. Now, Yeah, if you think about the traditional apology, and I think if you're of a certain age, you might be able to picture Jimmy Swagger with the tears streaming down his faint um

on stage. The book that I was talking with, the author I just called the Artists of Public Problem by Susan Wisebauer, and she um identified sort of certain commonalities in the very public apologies that we specifically have demanded over the years from politicians for their sexual mistake, UM, whether that's cheating or harassments or or whatever. Uh. And the first is that they get up in public and and they give it in person um to show how

serious that that they are, not through a statement or whatever. Uh. And often they had on one side their spouse, on the other side their pastor UM or other religious leader. And uh. Then they begin by acknowledging what they did wrong, UM, specifically apologizing directly to the victim UM as well as to their spouse. Usually UM. Sometimes they would go further and apologize other people, the people of you know that I represent the voters whatever. Mark Stanford, his apology just

went on and on. It was a pologize and good his friend Tom, you apologize to people of Congressional district, apologize the people of faith in South Carolina who might find others questions in our faith because he had to active quotes. So um. And then they and then they end by acknowledging they'll do better in the So what happened because we didn't hear sorry from Donald Trump very frequently and and we haven't heard it depends on how you define apology when it comes to what's happening with

with Governor Andrew Cuomo right now right so um. When I was mentioning this to to other experts of the apology as I said something about Donald Trump's apology after the Access Hollywood tape, and they said, like the fact that you're calling this an apology is like part of

the problem here. Like Donald Donald Trump after the Access Hollywood at it one of two occasions were sort of apologize for something, the other being his Charlotte stilpon marks, which he's been kind of fluffed back, um and and and he got up basically and he said, you know, his look like I you know, said a few things. Um, but it's not nearly as bounded what Bill Clinton did. And hill Rick Quinton was right there with him and the pivoted, stretching into an attack. So he didn't you

really acknowledge what he said and minimize it. So that's one way in which like we are seeing somewhat of an apology, like is speaking to a lesser case like you've you've been charged with manslaughter and you get up and you got look, I might have pushed a few people around, you know, like you're not you're not acknowledging what you did. And that Onemo did that started saying I may have made some women uncomfortable. That's not what

he's accused of. Well, well, the thing is Ryan, you know, in this frenetic news cycle, like we're all quickly moving on to the next thing. In many ways, this can be a very smart strategy if you just kind of write it out, you know, everybody might move on and you'll get to hold your seat. Yeah, I mean I think it depends. It also requires a certain sense of shamelessness. Um, Ralph Northam apologized and then he also didn't resign. You just hung on. And I think that Trump showed that

that strategy can work. That the the cost, the political cost for two other people of removing you from office, it's just really high. It's really hard Cuomwell can basically just you know, hold on to his seat and say I'm not going anywhere, and the legislature is going to have to do a lot of work to remove him from office. Someone is going to have to defeat him in a primary, someone's gonna have to defeat him in a general election. Well, it easier to just say hey,

you know whatever and move on. But the difference is that he could have apologized. He could have said, I did I did things wrong, I'm sorry, here's what I did wrong, here's the people that I've wrong. He didn't really do that. By the end of the original press conference in which he was giving us apologie, he was

already saying, wait for the facts. And and that's an indirect way of saying basically the same thing that a politician who says these women are all liars says, Like, if you say wait for the facts, then you're saying what these people are saying, it's not a factual. And if you're saying that, you're not really apologizing. And that's

the problem. So Ryan, one of the other things that I thought was really surprising in your story is the year that the traditional apology political apology was actually uniquely American and that we might becoming more like the rest of the world. Can you can you tell us what what that actually means, because I've always thought public apologies

were pretty universal idea. I think that the format in which we had required people to apologize in the past was very stylized and was very much um rooted in the sort of Christian confessions of sin um, you know, within certain churches where we're sort of stand up in publicly apologize, this is this one and pay Then why the politicians we think up who did the best at this? Uh format? Bill Clinton just did you know, biting the lower lip and I had sinned, you know, like that

that kind of apology. It's a very specific American requirement. The other reasons for this, The other reason why we sort of asked you to go to another country and and we're a waitress brings your food and you say thank you, like people lookink you're funny, right, And and I had it with some some people from another country about this. They're like, they're being paid to bring you food,

why are you saying thank you? And it's because we've Americans are uncomfortable with power differentials and so right, when someone is accused of this kind of behavior, it seems like they're taking advantage of their social situation. The only way to really cuberate that is for them to level down, to apologize and put themselves differ. Well. It's an interesting read and certainly a sign of the times. Ryan, Thank you so much. Ryan take back with Bloomberg News along

with Joel Webber, editor of Bloomberg Business Week. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovic from Bloomberg Radio. Leon Black He's the Wall Street billionaire. He appeared to be a main client of disgraced financier Jeffrey Epstein. He is stepping down as CEO of Apollo Global Management. And Tim, this is months ahead of schedule. Yeah, it is Shinelli Bossik is Wall Street reporter at Bloomberg News. Joinsing this now on the O

from right here in our New York City bureau. But we are doing social distancing. Socionally is not here in the studio somewhere, even though I've seen her many Yes, exactly, Hey, Shnally. As Carol mentioned, this happened months ahead of schedule. How big of a surprise was this to you? Listen, the fact that he stepped back was not a surprise from CEO. It was months a had a schedule. That was a surprise. But he is also stepping back to him as chairman

of Apollo. And remember that is a big step back. He's stepping back from the firm in such a big way. He's led the firm for thirty one years. He said in a letter to the board today that the press around his relationship with Jeffrey Epstein has been has been a real strain on him and has taken a toll on his health. And so he is looking to take a step back from the firm and from the spotlight. Why though, is it more about health, Is it more about stepping back from the spotlight? A little of both.

It looks like all I asked this today too, because the question is investors, when before he stepped down a CEO, investors really had put a lot of heat on Apollo and had really threatened to not be investing more with Apollo. Apollo zone performance has been really sluggish when you look at its performance next to its piers. So clearly investors and other stakeholders wanted answers, and Apollo has been making

very very drastic changes. Listen, the relationship between UH, Leon Black and Jeffrey Epstein, a hundred and fifty eight million dollars worth the payments was at a very big scale, even though a law firm found that there was no evidence of wrongdoing on Leon Black's part. So, uh, it's something certainly that had a lot of lingering questions, even after the report had came out and clarified that Leon Black had no engagement with any of the criminal activity

that Jeffrey Epstein was involved with. Otionally, what's then the reaction on Wall Street, not necessarily from from companies in terms of stock price movements, but specifically from your sources who you're talking to, where they are shocked as as many people were yes in the sense that this really was Leon Black's firm. For him to step back a CEO and become chairman, that was something a lot of people had expected. For him to take this mega step

back from the firm was a lot less expected. He is going to remain the single largest shareholder of Apollo, so that is one link he will still have. But from now on out, we can expect a much different firm ahead, and now the new CEO, Mark Rowan, it's really going to be up to him to show what that looks like. As an aside, Jake Clayton, the former chairman of the SEC will become now the chair of Apollo and the board will be expanded, so we have a different firm on our hands. Hey, so what about

Josh Harris? Right, So, he was seen as having at a closer relationship with Leon Black and deemed to be a more likely successor according to our reporting. What does it mean that he wasn't chosen to be the new CEO and if he leaves the firm is at a problem? Yeah, that's an interesting question because it's something that's definitely a big question on Wall Street right now. He is one

of the firm's co founders. He's very much involved in the firm, but he has a lot of side gigs, right, I mean, including UH co owner of UM, a bunch of sports teams, So we know Josh Harris has a life on the side. Uh Apolo is looking to merge with a Theme, which is a big insurance company it owns, and that was really the big brandchild of Mark Rowan, so more and more you're seeing the co founder Mark Rohan put a bigger and bigger stamp on the firm.

And you know, consistency is not a bad thing. The face of the firm, even underneath that level, is changing quite a bit. We've seen big deals uh, come out of the co presidents and new sorry the new cove co heads of the private equity group, which are Matt Nord and David Samber. And even seeing the younger generations start to do deals and put their stamp on the

firm is interesting as well. What about when it comes to Jay Clayton, who you mentioned, of course, former chair of the SEC has been a member of the company's board, but now becoming non executive chairman. What does he do at Apollo? Yeah, I think what people want to see is more independent on the board of Apollo and a firm that you know, it started really as a private firm, uh, and then even as a public firm in public markets.

After when public uh, it was still quite secretive, right and it was still had such a such a huge amount of its economics tied to its founders. They're changing even the voting structure of the firm and the share structure so that it's one vote, one share, and so as that happens as it becomes more institutionalized, to have someone like Jay Clayton kind of at the helmet's chair helps make it a more professional firm, and it brings it more in the ranks of a firm that more

institutional investors may own. Of course, that will depend on its performance. And also another thing people pointed out today is the ability to return dividends at the same page that black Stone where the shares are up this year. Well, and there is I feel like almost some symbolism or maybe a sign being sent by Jake Clayton being named this position, because listen, this is a guy with incredible

stature on Wall Street, the whole financial community. There is an assumption, you could make almost finale that he wouldn't have done this if he didn't feel comfortable staying at the firm. Just got about twenty seconds here. Yeah, that's that's the signal. This is a big, new institutional firm with a much more independent board, and that's the signal that they're trying to send to society. Well, great analysis,

um really appreciate it. Sni Bostic. She's Wall Street reporter at Bloomberg News on the phone in New York City. Whenever there's a big financial bank story, man, I'm always getting a message from her in the morning that just kind of puts it into perspective. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic

from Bloomberg Radio. Let's bring in Michael Sheldon. He is executive director, chief investment officer at High Tower RDM Financial based in Westport, Connecticut, and that's where he is on the phone. Michael, good to have you back. How are you good. Thanks very much, It's been a while, but good to hear from you. Yeah, what's going on in your world? What in terms of investment stories? Market stories

are a kind of front and center for you. Well, I thought I thought it would be interesting to put things in perspective, as you know, as you well know, tomorrow is going to be the one year anniversary of the market bottom that we had back in the two thousand and twenty. Back then, back in March of two thousand twenty, things didn't look very good, but we had the fastest decline into a bear market, and over the past twelve months following that, we had the biggest rally

in the post World War two period. So I thought it would help to put things in perspective. Now, what what should investors expect in the second year of a bull market? So in the second year of bull markets, we look back at all the bull markets going back to World War Two. The markets have posted a positive gain eighty six percent of the time, with an average gain of eleven percent. So I think looking ahead, investors are looking at and they're starting to talk a little

bit about inflation. They're talking about interest rates, but the big story will continue to be the economic expansion. And we're constructive on the market's overall, but we think investors may need to moderate their return expectations a little bit in the year ahead. Okay, so what do you mean by that? What do you mean by moderate expectations? What's a realistic expectation for an investor to have this year? Well,

I think we were looking for further gains. We try not to put a level on the SMP five hundred. It's really almost impossible to target what the actual level of the SMP five hundred will be in a given year. But we try and look at the economic fundamentals. So we look at things like employment and GDP, consumer spending, business spending, UM and are those things those metrics heading in the right direction, And we think they are right now.

For example, the unemployment rate right now is around six and that's projected to fall to about four and a half percent in the next couple of years. Corporate profits were negative last year, but they're currently forecast rise about this year and next year. So overall off of the bad low, right off off of a pretty deep low, that that's correct. And if you look at GDP, GDP numbers were obviously we had a major major decline in

GDP last year. Now things have really turned around quite a bit, and it's hard to believe, but either this quarter or next quarter GDP will once again rise to an all time high. So UM, there are still some risks out there. Consumer competence, for example, has really not recaptured a lot of its games, and the weekly jobless claims that seven hundred and seventy thousand is still pretty elevated. But I think the majority of economic data is relatively

positive right now. But I do wonder. I don't know if we can compare the recovery after the financial crisis versus the recovery after COVID uh. You know, it does feel like it's going to be a fairly strong bounce back, especially the second half of the year. Is that how you see it? Is their similarities or is it vastly different from the recovery that we got after the financial crisis? Well,

they were very two, very different events. Um, the downturn that we had in two thousand and eight two thousand nine was really a financial crisis led by problems with the banks and and lending to people who didn't deserve to have loans. In this situation, it was more of sort of an exogenous healthcare related scare that caused the economy to shut down. So it's a very different type

of event. I think that's why once the economy opened up, we were able to have a more rapid recovery in the economy, and you don't have necessarily the kind of scars that we had in the financial system which held the economy back for several years. Looking at two thousand eight, two thousand nine, what are the scars in the financial system that we're going to see on the other side

of this. You mentioned the unemployment rate, and and one thing that I keep in mind when we talked about the unemployment rate is the labor force participation rate and the way that so many people have dropped out of the workforce over the last year. It's disaproportionately affected women who many of them whom have had to stay at home as kids have not been in school. In person, what does that scarring look like and how does it

manifest in the markets? Um Well, I will commented earlier on the weekly jobless claims, which are around seven seventy and that's on a weekly basis, so that really is historically very extended. It's a very high number. But you're right that the unemployment rate doesn't really capture some of the additional workers who have dropped out of labor force. And there are also workers who are actually receiving pandemic unemployment relief, which is not really captured in the numbers.

So there's a long ways to go to recapture all of the lost workers. But given the momentum that the economy has, it looks like things should continue to recover as long as the vaccine role oute goes on track and the rest of the global economy recovers as well, they'll probably be a little later than the US. So I'm just I was quick doing some tally. The SNP is up seventy six from that market bottom one year ago. NASDA so a doubling. And the Russell because we've been

watching that small cap spaces. Mind you, they were beaten up and just a SmackDown in a big way. So so where do we Michael, where do we go? Then? Where do you want to put? Put some new bats? And just got about forty seconds here. Sure, I think the important story for two thousand twenty one, as opposed to the last several years, it was really mainly that technology. I think you're going to see more balanced participation in

the market. You're going to see not only technology, but you're going to see the industrials, the financials and other parts of the market. And it won't just be large cap, it'll be mid cap, in small cap, and I think possibly for the first time in many years, you may finally start to see foreign markets participate alongside with the US market. All Right, we're gonna have to leave it there.

Michael Sheldon, executive director and chief investment officer at High Tower r DM Financial Group, joining US on the phone from Westport, Connecticut. Michael, thanks so much for taking the time today. Yeah, listen, I mean some of the numbers we're gonna probably be seeing over the next six months are going to be like what And you just gotta remember where we're coming from one year ago, remember that March. It's pretty rough, alright, but that was the beginning of

the bounce back. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube. Search to Bloomberg Global News.