Apollo Global, Blackstone and KKR Facing Justice Department Investigation – Bloomberg

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According to a report by Bloomberg on Friday, Apollo Global Management (NYSE:APO), Blackstone (NYSE:BX), and KKR & Co. (KKR) are facing a Justice Department investigation.

Bloomberg said sources told them that the investigation into the private equity firms is said to be regarding whether they influence boards across businesses in America in ways that violate antitrust laws.

Federal investigators are looking into whether the practise of private equity firms appointing executives to the boards of businesses operating in the same industry damages competition.

Antitrust authorities are worried that board members who sit on rival companies in the same industry could persuade those businesses to act in a way that maximizes advantages for all parties rather than aggressively competing to offer the best services or lowest cost to customers.

Bloomberg said people familiar with the matter told them that Blackstone, Apollo, KKR and other large and small private equity firms have received ‘civil investigative demands’ about the topic from the Justice Department’s antitrust division. The civil investigative demands are comparable to subpoenas, but Bloomberg stated that receiving one doesn’t imply wrongdoing.

In addition, antitrust officials are said to have been speaking with the research community on the issue over the past year, especially in examining how it impacts rival healthcare companies.