Leon Black’s possessions include one of Edvard Munch’s versions of “The Scream” and a famed Pablo Picasso sculpture but, in 2007, the billionaire financier received something far more precious.

A garden party in Mr Black’s honour that year, at Manhattan’s Museum of Modern Art, marked his arrival as an American luminary. Guests including New York mayor Michael Bloomberg, financial titans Carl Icahn and Stephen Schwarzman, and members of the Rockefeller and Estée Lauder dynasties celebrated the “important contributions to the cultural community” made by Mr Black and his wife Debra, who is a Broadway producer, as well as the Hollywood auteur Martin Scorsese.

For a man who earned billions buying companies that others thought doomed, recognition alongside the celebrated film director was a turnround of its own. Yet, as so often in Mr Black’s life, triumph fused with potential disaster.

Also present was Leon Shahinian, a California official who had flown to New York on a private jet that, authorities told a court, was paid for by Apollo Global Management. At the time, a Californian state pension scheme was finalising a $600m deal to buy roughly one-tenth of Mr Black’s firm. The deal earned $13m for Alfred Villalobos, a middleman working for Apollo who was also at the party, and was later accused of trying to bribe Mr Shahinian. Neither Apollo, Mr Black nor Mr Shahinian were accused of any wrongdoing. Mr Villalobos took his own life shortly before he was due to stand trial.

This week, Mr Black faced a public reckoning over his relationship with another man who committed suicide while awaiting justice: Jeffrey Epstein, who was jailed for sex offences in 2008 but faced trial on new charges of running an international sex-trafficking ring. The Apollo founder announced plans to step down as chief executive and acknowledged that he paid the late paedophile $158m for tax advice and other financial services. The father of four said he had been ignorant of the worst allegations against Epstein.

Born in New York in 1951 to a watercolour artist and a rabbi turned businessman, Mr Black majored in philosophy at Dartmouth before enrolling in Harvard Business School. He did not enjoy it. But his choices narrowed when his father, then chairman of banana importer United Brands, leapt to his death from New York’s Pan-Am building in 1975. Eli Black was later accused of bribing a Honduran politician.

Mr Black worked as a management consultant, and then in publishing, before landing at second-tier investment bank Drexel Burnham Lambert. There, he and Michael Milken instigated a financial revolution.

Drexel was “a rocket ship that went up for 12 years,” Mr Black has said. The ascent was powered by junk bonds — expensive financial fuel for companies that had no other way to borrow. Mr Milken relentlessly sold the bonds, and Mr Black devised intricate deals that used them, including KKR’s record-setting $28bn buyout of RJR Nabisco.

“Then,” Mr Black told an audience last year, “it came crashing down.” Mr Milken was indicted and later pleaded guilty to violating securities laws. In 1990, Drexel filed for bankruptcy — just weeks after Mr Black had complained about the size of his bonus.

Mr Black, who was not accused of any wrongdoing, then founded Apollo with other Drexel alumni, using Manhattan office space borrowed from a former client. The firm’s maiden deal used money from French bank Credit Lyonnais to buy assets from Executive Life, a California life insurer bankrupted by losses on bonds that Drexel had sold.

The fallout lasted for years. Several French banking officials pleaded guilty to violating US foreign ownership laws. Credit Lyonnais and others paid more than $1bn in fines and settlements. Apollo said it knew of nothing untoward and no one there was charged.

Still, the trade was hugely profitable and buying up distressed assets became a calling card for Apollo. Its aggressive executives leapt on Twinkies maker Hostess Brands, chemicals group LyondellBasell, and other businesses left for dead. “You’d either make money on the debt,” Mr Black explained or, if a borrower could not pay, “you would end up owning the companies.”

It was a deliberately adversarial strategy. One billionaire privately laments that Mr Black allowed a business dispute to sour their friendship. The late chemicals tycoon Jon Huntsman wrote that he took “every opportunity to publicly charge Black . . . with unethical conduct” after concluding that in one deal gone bad, Apollo had “made promises it never intended to keep”.

“Everything is a negotiation with Leon”, says a former Drexel colleague.

Associates say he is a Renaissance man who fluently discusses history and literature. But his hard-charging attitude also extends to art. “I am an obsessive compulsive sicko collector,” he has said. “I love the art of acquisition . . . My wife goes to bed at 11, and I wander around and I rehang things in the apartment. That’s a form of relaxation.”

On Monday, Mr Black announced plans to donate $200m to initiatives that “protect and empower women”, to atone for the financial relationship with Epstein that had unnerved some Apollo investors. In the days that followed, Apollo’s shares rallied, adding almost enough to Mr Black’s fortune to cover the promised donations. Mr Black seemed to have struck another bargain — this time, with his conscience.

mark.vandevelde@ft.com and sujeet.indap@ft.com