Theodore Joseph Forstmann (February 13, 1940 – November 20, 2011) was one of the founding partners of
Forstmann Little & Company
Forstmann, Little & Company was a private equity firm, specializing in leveraged buyouts (LBOs). At its peak in the late 1990s, Forstmann Little was among the largest private equity firms globally. Ultimately, the firm would suffer from the burs ...
, a
private equity
In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a typ ...
firm, and chairman and CEO of IMG, a global sports and media company. A
billionaire
A billionaire is a person with a net worth of at least one billion (1,000,000,000, i.e., a thousand million) units of a given currency, usually of a major currency such as the United States dollar, euro, or pound sterling. The American busin ...
philanthropist
Philanthropy is a form of altruism that consists of "private initiatives, for the public good, focusing on quality of life". Philanthropy contrasts with business initiatives, which are private initiatives for private good, focusing on material ...
. He supported
school choice
School choice is a term for education options that allow students and families to select alternatives to public schools.
The most common in the United States, by both the number of programs and by the number of participating students are scho ...
and funded scholarship programs for the disadvantaged. He led a tour of refugee camps in the former Yugoslavia.
Early life
Forstmann was born and raised in
Greenwich, Connecticut
Greenwich (, ) is a town in southwestern Fairfield County, Connecticut, United States. At the 2020 census, the town had a total population of 63,518. The largest town on Connecticut's Gold Coast, Greenwich is home to many hedge funds and othe ...
, the second of six children. He was the son of Dorothy (née Mercadante) and Julius Forstmann, who ran a wool business that went bankrupt in 1958. Julius had inherited Forstmann Woolen Co. from his own father, one of the richest American businessmen. Forstmann had German and Italian ancestry. He was a graduate of
Greenwich Country Day School
The Greenwich Country Day School is a co-educational, independent day school in Greenwich, Connecticut, United States, founded in 1926. As of 2019, it enrolled some 1190 students from nursery to 12th grade level. In November 2017, Greenwich Cou ...
and
Phillips Academy
("Not for Self") la, Finis Origine Pendet ("The End Depends Upon the Beginning") Youth From Every Quarter Knowledge and Goodness
, address = 180 Main Street
, city = Andover
, state = M ...
. He then played goalie on the ice hockey team at
Yale University
Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the worl ...
where he was a member of
Delta Kappa Epsilon
Delta Kappa Epsilon (), commonly known as ''DKE'' or ''Deke'', is one of the oldest fraternities in the United States, with fifty-six active chapters and five active colonies across North America. It was founded at Yale College in 1844 by fiftee ...
fraternity. Forstmann later attended
Columbia Law School
Columbia Law School (Columbia Law or CLS) is the law school of Columbia University, a private Ivy League university in New York City. Columbia Law is widely regarded as one of the most prestigious law schools in the world and has always ranked ...
where he earned a
Juris Doctor
The Juris Doctor (J.D. or JD), also known as Doctor of Jurisprudence (J.D., JD, D.Jur., or DJur), is a graduate-entry professional degree in law
and one of several Doctor of Law degrees. The J.D. is the standard degree obtained to practice law ...
, which he financed through gambling proceeds.
Forstmann Little & Company
Forstmann, an attorney, founded Forstmann Little in 1978 with his younger brother Nicholas, and
Brian Little
Brian Little (born 25 November 1953) is an English football manager and former player.
As a player, Little was a striker who spent his entire career for Aston Villa in a career that spanned from 1971 to 1980. He made 247 league appearances, ...
. Forstmann's second brother, J. Anthony Forstmann, founded ForstmannLeff.
Under Forstmann's leadership, Forstmann Little & Company made 31 acquisitions and significant investments and returned more than $15 billion of profits to investors. In addition to IMG, some of the firm's investments included
Gulfstream Aerospace
Gulfstream Aerospace Corporation is an American aircraft company and a wholly owned subsidiary of General Dynamics.
Gulfstream designs, develops, manufactures, markets, and services business jet aircraft. Gulfstream has produced more than 2,000 ...
Topps
The Topps Company, Inc. is an American company that manufactures chewing gum, candy, and collectibles. Formerly based in New York City, Topps is best known as a leading producer of American Football Card, American football, Baseball card, baseb ...
Community Health Systems
Community Health Systems (CHS) is a Fortune 500 company based in Franklin, Tennessee. It was the largest provider of general hospital healthcare services in the United States in terms of number of acute care facilities. In 2014, CHS had around 20 ...
,
Ziff Davis
Ziff Davis, Inc. is an American digital media and internet company. First founded in 1927 by William Bernard Ziff Sr. and Bernard George Davis, the company primarily owns technology-oriented media websites, online shopping-related services, a ...
,
Yankee Candle
The Yankee Candle Company (referred to simply as Yankee Candle) is an American manufacturer and retailer of scented candles, candleholders, accessories, and dinnerware. Its products are sold by thousands of gift shops nationwide, through catal ...
,
General Instrument Corporation
General Instrument (GI) was an American electronics manufacturer based in Horsham, Pennsylvania, specializing in semiconductors and cable television equipment. They formed in New York City in 1923 as an electronics manufacturer. During the 1950s, ...
, and most recently,
Citadel Broadcasting
Citadel Broadcasting Corporation was a Las Vegas, Nevada-based broadcast holding company. Citadel owned 243 radio stations across the United States and was the third-largest radio station owner in the country. Only iHeartMedia and Cumulus Media ...
and
24 Hour Fitness
24 Hour Fitness is a privately owned and operated fitness center chain headquartered in Carlsbad, California. It is the second largest fitness chain in the United States based on revenue after LA Fitness, and the fourth in number of clubs (behi ...
.
Career
Critic of junk bonds
While playing golf in the late 1980s, Ted Forstmann inadvertently coined the term for which he became best known. His golf partner asked Forstmann what it meant for a company to be taken over by a buyout firm. "It means the barbarians are at the gates," replied Forstmann. The term became part of Wall Street lore and was connected inseparably to the private equity industry that Forstmann pioneered and flourished in.
Forstmann was featured prominently in the book '' Barbarians at the Gate: The Fall of RJR Nabisco'', as he and his company attempted to acquire RJR Nabisco. In the subsequent film adaptation, he was portrayed by actor
David Rasche
David Rasche ( ; born August 7, 1944) is an American theater, film and television actor who is best known for his portrayal of the title character in the 1980s satirical police sitcom ''Sledge Hammer!'' Since then he has often played characters ...
. The book portrayed Forstmann as a critic of KKR's
Henry Kravis
Henry R. Kravis (born January 6, 1944) is an American businessman, investor, and philanthropist."junk" bonds to finance mergers and acquisitions. (Forstmann referred to junk bonds as "
wampum
Wampum is a traditional shell bead of the Eastern Woodlands tribes of Native Americans. It includes white shell beads hand-fashioned from the North Atlantic channeled whelk shell and white and purple beads made from the quahog or Western Nor ...
") When the junk bond market later fell into disfavor as a result of scandal, Forstmann's criticism was seen as prescient, as his more conventional investment strategy had been able to maintain nearly the same level of profitability as companies such as KKR and
Revlon
Revlon, Inc. is an American multinational company dealing in cosmetics, skin care, fragrance, and personal care. The headquarters of Revlon was established in New York City on March 1, 1932, where it still remains. Revlon was founded by brothe ...
that built their strategy around
high-yield debt
In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit event ...
.
Credit crisis
Forstmann accurately predicted the worsening of the
credit crisis
A credit crunch (also known as a credit squeeze, credit tightening or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks. A credit cr ...
in July 2008, when most pundits believed the crisis had reached its peak. Forstmann argued that the excess of money pumped into the economy after the September 11 attacks in 2001 distorted the decision-making abilities of nearly everyone in finance. With an oversupply of money, bankers and other financiers took on more risk with less return. While this allowed many to make money for a time, eventually this risk accumulated, and the consequences led to the credit crisis.
Civic life
In 1995, Forstmann was given the "Patron of the Arts Award" by the National Academy of Popular Music at the
Songwriters Hall of Fame
The Songwriters Hall of Fame (SHOF) is an American institution founded in 1969 by songwriter Johnny Mercer, music publisher/songwriter Abe Olman, and publisher/executive Howie Richmond to honor those whose work, represent, and maintain, the her ...
induction ceremonies.
Forstmann dedicated significant personal resources to the cause of education reform. He was a prominent supporter of
school choice
School choice is a term for education options that allow students and families to select alternatives to public schools.
The most common in the United States, by both the number of programs and by the number of participating students are scho ...
. In 1998, he and friend
John T. Walton
John Thomas Walton (October 8, 1946 – June 27, 2005) was an American war veteran and a son of Walmart founder Sam Walton. He was also the chairman of True North Venture Partners, a venture capital firm. Walton cofounded the Children's Scholars ...
established the Children's Scholarship Fund to provide tuition assistance for low-income families wanting to send their children to private school.
In February 2011, Forstmann became a signatory of
The Giving Pledge
The Giving Pledge is a campaign to encourage extremely wealthy people to contribute a majority of their wealth to philanthropic causes. , the pledge has 236 signatories from 28 countries. Most of the signatories of the pledge are billionaires, an ...
.
He was an active member of the Republican Party. He served as co-chairman of
George H. W. Bush
George Herbert Walker BushSince around 2000, he has been usually called George H. W. Bush, Bush Senior, Bush 41 or Bush the Elder to distinguish him from his eldest son, George W. Bush, who served as the 43rd president from 2001 to 2009; pr ...
Forstmann never married. He adopted two boys in the 1990s after meeting them at an orphanage in
South Africa
South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. It is bounded to the south by of coastline that stretch along the Atlantic Ocean, South Atlantic and Indian Oceans; to the ...
.
Forstmann dated
Padma Lakshmi
Padma Parvati Lakshmi (; born September 1, 1970) is an Indian-born American author, activist, actress, model, philanthropist, and television host. She has hosted the cooking competition program ''Top Chef'' on Bravo continuously since season 2 ...
, the host and judge of ''
Top Chef
''Top Chef'' is an American reality competition television series which premiered on Bravo on March 8, 2006. The show features chefs competing against each other in culinary challenges. The contestants are judged by a panel of professional che ...
''.Teddy Forstmann Wanted Padma Lakshmi's Baby to Be Raised as His Own Daughter vanityfair.com January 3, 2013. During a break in their relationship, Lakshmi gave birth to a daughter. Lakshmi was initially unclear as to the father's identity, and it was later revealed by DNA testing to be Adam Dell.
In December 2006, newspaper reports on the inquiry into the death of
Diana, Princess of Wales
Diana, Princess of Wales (born Diana Frances Spencer; 1 July 1961 – 31 August 1997) was a member of the British royal family. She was the first wife of King Charles III (then Prince of Wales) and mother of Princes William and Harry. Her ac ...
alleged that
U.S. intelligence
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
agencies had bugged Forstmann's phone or plane and monitored his relationship with Diana. She and her sons were said to have planned to visit him in summer 1997, but British security reportedly blocked the visit over security concerns related to the bugging.
In May 2011, Forstmann was diagnosed with brain cancer and received treatment at the
Mayo Clinic
The Mayo Clinic () is a nonprofit American academic medical center focused on integrated health care, education, and research. It employs over 4,500 physicians and scientists, along with another 58,400 administrative and allied health staff, ...
. He died on November 20, 2011, of complications from brain cancer. He had a
net worth
Net worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities. Since financial assets minus outstanding liabilities equal net financial assets, net ...
of
US$
The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
Forbes.com
''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also repo ...
BusinessWeek
''Bloomberg Businessweek'', previously known as ''BusinessWeek'', is an American weekly business magazine published fifty times a year. Since 2009, the magazine is owned by New York City-based Bloomberg L.P. The magazine debuted in New York City ...
New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...