Apollo Global Management has climbed to the pinnacle of the private equity world, reaping billions of dollars in profit and raising a huge new buyout fund.
But some of its executives are having doubts.
Two senior partners in Apollo’s private equity division, Stan Parker and Jordan Zaken, plan to leave the firm, according to people briefed on the matter who spoke only on the condition of anonymity. They would be following Ali Rashid, another senior partner who quietly left this year.
The departures of these three partners — all in their late 30s — underscore the growing pains that Apollo is facing as it adjusts to life as a publicly traded company. The departing partners balked at the idea of signing on to help manage the new fund, a task that could span a decade, the people said. They were asked to agree to a new set of terms, including accepting payments in stock rather than cash, and delaying payments further into the future. Also factoring into the decisions was the wealth the partners have accumulated over their many years at Apollo.
A spokesman for Apollo declined to comment on the latest departures.
Apollo has recently started to invest its new $18.4 billion private equity fund, which it raised on the heels of its success last year. While some turnover is not uncommon when a private equity firm raises a new fund, the dissatisfaction among some top Apollo partners is notable, some of the people said. In addition, the firm’s president, Marc Spilker, a former Goldman Sachs executive who joined in late 2010 as Apollo was preparing to go public, stepped down in March without offering an explanation.
The new fund, the biggest in Apollo’s history, points to the firm’s ambitions to tackle large buyouts of companies. But not all the partners were happy with the move to raise such a large war chest — a decision made by the firm’s three founders. Some partners thought the size of the fund would diminish its ability to generate market-beating returns, the people briefed on the situation said.
Founded in 1990 by Leon Black, Joshua Harris and Marc Rowan — three investment bankers who worked at the now-defunct Drexel Burnham Lambert — Apollo attracted a number of young financiers who quickly became multimillionaires. Many, including Mr. Parker, Mr. Rashid and Mr. Zaken, joined Apollo near the beginning of their Wall Street careers.
The firm, which went public in 2011, extended its record of success after the financial crisis. It struck a series of canny deals, including a takeover of the chemical maker LyondellBasell Industries that was among the most profitable private equity investments ever. Apollo’s buyout fund dating to 2008, a $14.7 billion pool of capital, has had a net internal rate of return of 30 percent through last year.
While the firm is perhaps best known for its buyouts, it has a larger business in credit and a growing segment in real estate as well. Private equity made up $49.9 billion of Apollo’s $161.2 billion of assets under management as of Dec. 31.
Mr. Black, collecting dividends on his shares and reaping profits from his personal investments, took home $546.3 million in 2013, making him the highest-earning executive in the industry.
Replicating these past successes is no easy task, especially as elevated stock prices make bargains harder to come by. Apollo’s profit in the fourth quarter of last year, including unrealized investment gains, fell 36 percent compared with results in the period a year earlier, though the decline was affected by a surge in profit in the earlier quarter.
Still, many analysts express confidence that Apollo’s particular investing style — relying often on its expertise in credit — can continue to serve it well.
“Their ability to raise more money in the current fund is a testament to how well they’ve done in past funds,” Devin Ryan, an analyst at JMP Securities, said on Tuesday. “The environment has become more challenging to put money to work. But they are so broad with respect to their industry focus that they will be patient.”
Not everyone was willing to wait, however. And some people briefed on the matter warned about more potential departures.
Mr. Rashid, 37, spent most of his career at Apollo, joining the firm in 2000 after two years at Goldman. Mr. Zaken, 39, who is involved in Apollo’s power and energy investments, also started at Goldman before joining Apollo in 1999. Mr. Parker, 38, joined Apollo in 2000 after working at Salomon Smith Barney.
Mr. Zaken and Mr. Parker could not be reached for comment.
A fourth private equity partner, Andrew Africk, left last year after 21 years at Apollo.
Mr. Africk, 47, has formed an investment company called Searay Capital that he is running from his home in Manhattan, regulatory filings show. He recently bought a 6.4 percent stake in STR Holdings, a solar panel technology company.
Apollo has remained under the control of its three founders, with Mr. Black the largest individual shareholder. But the three have also cultivated interests outside the firm.
Mr. Harris led a group of investors that bought the Philadelphia 76ers basketball team in 2011. And Mr. Rowan made a personal investment last year in Beats Music, a streaming music service. Mr. Black spends millions of dollars on fine art.
Apollo is scheduled to report its first-quarter results on Thursday. The three founders will have an opportunity next week to sell some of their shares.
Michael J. de la Merced and David Gelles contributed reporting.
An earlier version of this article misstated the focus of Jordan Zaken's work at Apollo Global Management. He is involved in the firm’s investments in power and energy, not in cable, telecommunications and technology.