Theodore Joseph Forstmann (February 13, 1940 – November 20, 2011) was one of the founding partners of
Forstmann Little & Company
Forstmann, Little & Company was an American 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 fro ...
, a
private equity
Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...
firm, and chairman and CEO of
IMG img or IMG is an abbreviation for image.
img or IMG may also refer to:
Science, technology, and mathematics
*IMG (file format), file that stores a complete and uncompressed copy of the contents of a storage device
* IMG, a prefix for camera ima ...
, a global sports and media company. A
billionaire
A billionaire is a person with a net worth of at least 1,000,000,000, one billion units of a given currency, usually of a major currency such as the United States dollar, euro, or pound sterling. It is a sub-category of the concept of the ultr ...
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 traditional public schools.
School choice options include scholarship tax credit programs, open enrollment laws (which allow students to att ...
and funded scholarship programs for the disadvantaged. He led a tour of refugee camps in the former
Yugoslavia
, common_name = Yugoslavia
, life_span = 1918–19921941–1945: World War II in Yugoslavia#Axis invasion and dismemberment of Yugoslavia, Axis occupation
, p1 = Kingdom of SerbiaSerbia
, flag_p ...
.
Early life
Forstmann was born and raised in
Greenwich, Connecticut
Greenwich ( ) is a New England town, town in southwestern Fairfield County, Connecticut, United States. As of the 2020 United States census, 2020 census, it had a population of 63,518. It is the largest town on Gold Coast (Connecticut), Connectic ...
, the second of six children. He was the son of Dorothy ( 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 Co ...
and
Phillips Academy
Phillips Academy (also known as PA, Phillips Academy Andover, or simply Andover) is a Private school, private, Mixed-sex education, co-educational college-preparatory school for Boarding school, boarding and Day school, day students located in ...
. He then played goalie on the ice hockey team at
Yale University
Yale University is a Private university, private Ivy League research university in New Haven, Connecticut, United States. Founded in 1701, Yale is the List of Colonial Colleges, third-oldest institution of higher education in the United Stat ...
where he was a member of
Delta Kappa Epsilon
Delta Kappa Epsilon (), commonly known as ''DKE'' or ''Deke'', is one of the oldest Fraternities and sororities, fraternities in the United States, with fifty-six active chapters and five active Colony (fraternity or sorority), colonies across No ...
fraternity. Forstmann later attended
Columbia Law School
Columbia Law School (CLS) is the Law school in the United States, law school of Columbia University, a Private university, private Ivy League university in New York City.
The school was founded in 1858 as the Columbia College Law School. The un ...
where he earned a
Juris Doctor
A Juris Doctor, Doctor of Jurisprudence, or Doctor of Law (JD) is a graduate-entry professional degree that primarily prepares individuals to practice law. In the United States and the Philippines, it is the only qualifying law degree. Other j ...
, which he financed through gambling proceeds.
Forstmann Little & Company
Forstmann, an attorney, founded Forstmann Little in 1978 with his younger brother
Nicholas
Nicholas is a male name, the Anglophone version of an ancient Greek name in use since antiquity, and cognate with the modern Greek , . It originally derived from a combination of two Ancient Greek, Greek words meaning 'victory' and 'people'. In ...
, 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 subsidiary of General Dynamics.
Gulfstream designs, develops, manufactures, markets, and services business jet aircraft. Gulfstream has produced more than 2,000 aircraft sinc ...
,
Dr. Pepper
Dr Pepper is a carbonated soft drink. Dr Pepper was created in the 1880s by the American pharmacist Charles Alderton in Waco, Texas, and was first nationally marketed in the United States in 1904. It is manufactured by Keurig Dr Pepper in th ...
,
Topps
The Topps Company, Inc. is an American company that manufactures trading cards and other collectibles. Formerly based in New York City, Topps is best known as a leading producer of Baseball card, baseball and other sports and Non-sports tradi ...
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 2 ...
,
Ziff Davis
Ziff Davis, Inc. is an American digital media and internet company. Founded in 1927 by William Bernard Ziff Sr. and Bernard George Davis, the company primarily owns technology- and health-oriented media websites, online shopping-related servi ...
,
Yankee Candle
The Yankee Candle Company, Inc., doing business 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 ca ...
,
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 founded and developed by Larry Wilson. Citadel owned 243 radio stations across the United States and was the third-largest radio station owner in the count ...
and
24 Hour Fitness
24 Hour Fitness is a privately held 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 (behin ...
.
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
R. J. Reynolds Nabisco, Inc., doing business as RJR Nabisco, was an American conglomerate, selling tobacco and food products, headquartered in the Calyon Building in Midtown Manhattan, New York City. R. J. Reynolds Nabisco stopped ...
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 characte ...
. The book portrayed Forstmann as a critic of KKR's
Henry Kravis
Henry Roberts 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 ...
".) 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, perfume, and personal care. The headquarters of Revlon was established in New York City on March 1, 1932, where it remains. Revlon was founded by brothers Charle ...
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 even ...
.
Credit crisis
Forstmann accurately predicted the worsening of the
credit crisis
A credit crunch (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 crunch generally ...
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
The September 11 attacks, also known as 9/11, were four coordinated Islamist terrorist suicide attacks by al-Qaeda against the United States in 2001. Nineteen terrorists hijacked four commercial airliners, crashing the first two into ...
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 heri ...
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 traditional public schools.
School choice options include scholarship tax credit programs, open enrollment laws (which allow students to att ...
. In 1998, he and friend John T. Walton 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 charitable campaign, founded by Bill Gates and Warren Buffett, to encourage wealthy people to contribute a majority (i.e. more than 50%) of their wealth to philanthropic causes. , the pledge has had 236 signatories from 28 ...
.
He was an active member of the Republican Party. He served as co-chairman of
George H. W. Bush
George Herbert Walker BushBefore the outcome of the 2000 United States presidential election, he was usually referred to simply as "George Bush" but became more commonly known as "George H. W. Bush", "Bush Senior," "Bush 41," and even "Bush th ...
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. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
.
Forstmann dated
Padma Lakshmi
Padma Parvati Lakshmi (; née Vaidynathan; born September 1, 1970) is an American television host, model, author, businesswoman, and activist. She rose to prominence by hosting the Bravo cooking competition program '' Top Chef'' (2006–2023). ...
, the host and judge of ''
Top Chef
''Top Chef'' is an American reality competition television series which premiered on Bravo in March 2006. The show features chefs competing against each other in culinary challenges. The contestants are judged by a panel of professional chefs ...
Adam Dell
Adam R. Dell (born January 14, 1970) is an American venture capitalist and is the brother of Michael Dell, the founder of computer manufacturing company Dell Inc.
Early and personal life
Dell was born in Houston, Texas, to a German-Jewish fam ...
.
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 Charles III (then Prince of Wales) and mother of Princes William, ...
alleged that
U.S. intelligence
The United States Intelligence Community (IC) is a group of separate U.S. federal government intelligence agencies and subordinate organizations that work to conduct intelligence activities which support the foreign policy and national secur ...
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
A brain tumor (sometimes referred to as brain cancer) occurs when a group of cells within the brain turn cancerous and grow out of control, creating a mass. There are two main types of tumors: malignant (cancerous) tumors and benign (non-cance ...
and received treatment at the
Mayo Clinic
Mayo Clinic () is a Nonprofit organization, private American Academic health science centre, academic Medical centers in the United States, medical center focused on integrated health care, healthcare, Mayo Clinic College of Medicine and Science ...
. He died on November 20, 2011, of complications from brain cancer. He had a net worth of $1.8 billion as of 2011.Ted Forstmann profile
Forbes.com
''Forbes'' () is an American business magazine founded by B. C. Forbes in 1917. It has been owned by the Hong Kong–based investment group Integrated Whale Media Investments since 2014. Its chairman and editor-in-chief is Steve Forbes. The c ...
BusinessWeek
''Bloomberg Businessweek'', previously known as ''BusinessWeek'' (and before that ''Business Week'' and ''The Business Week''), is an American monthly business magazine published 12 times a year. The magazine debuted in New York City in Septembe ...
New York Times
''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...
'' article on Forstmann's efforts to improve education by giving school choice
2005 Forbes 400 entry
- 2004 ''New York Times'' article on Forstmann's planned retirement in 2006.
Ted Forstmann's Bio