April 24 (Bloomberg) -- Leon Black, founder of Apollo Management LP, said executives of the New York-based buyout firm were examining whether to sell shares to the public, a step being taken by rival Blackstone Group LP.

``We're looking at this, as is every other private-equity fund,'' Black, 55, said today during a panel discussion at the Milken Institute Global Conference in Beverly Hills, California. Any setback to equity markets, trading at record highs, would likely come from a ``geopolitical'' crisis, he said.

Apollo is also considering the private sale of shares, which would raise capital while avoiding the scrutiny that comes with an initial public offering, two people familiar with the talks said April 5. A private placement wouldn't preclude an IPO, and would allow Apollo to gauge the success of Blackstone's offering before going ahead with its own, they said.

The ``biggest plus'' of an IPO is having shares to pay for acquisitions, Black said. ``A real minus'' is complying with the Sarbanes-Oxley corporate governance law and ``being under that microscope'' of investors, he said.

``When you go public, clients don't feel you lost their money,'' Black said. ``They feel like you stole their money.''

Black's partnership has invested $16 billion in the past 17 years in companies ranging from casino operator Harrah's Entertainment Inc. to retailer Claire's Stores Inc.

Buyout firms have raised more than $220 billion since the start of 2006, prompting industry executives such as Black to consider IPOs as they plan for succession.

Glass Half Empty

Blackstone, founded in 1985 by bankers Stephen Schwarzman and Peter G. Peterson, said in March it may go public. The New York-based firm said it aimed to raise $4 billion.

Apollo has tested the public markets before, raising $1.5 billion in an IPO of a buyout fund in Europe last May. Shares of AP Alternative Assets LP lost as much as 14 percent of their value after the sale, and the stock is now trading at $19.60, down from its $20 IPO price.

At the Milken conference, Black described himself as ``generally a glass-half-empty person,'' and said he expected investment returns to decline as buyout firms ``throw'' money at deals. While not predicting a market drop, he said the most likely source for a decline would be a ``surprise, unpredictable, geopolitical thing,'' he said.

Still, Black is optimistic about the economy, saying it's not ``about to fall over a cliff.''

To contact the reporters on this story: Seth Lubove in Los Angeles at slubove@bloomberg.net; Jason Kelly in Los Angeles at jkelly14@bloomberg.net.

Last Updated: April 24, 2007 17:23 EDT