Theodore J. Forstmann

Theodore J. Forstmann (born 1940) is one of the founding partners of Forstmann Little & Company, a private equity firm, and chairman and CEO of IMG, a leading international talent agency. ^[1] Forstmann is a graduate of Greenwich Country Day School, Phillips Academy, Yale University and Columbia University Law School with what is now a juris doctorate. At Yale, he was a member of Delta Kappa Epsilon fraternity. He is usually known as "Ted" (occasionally "Teddy" to friends and family).

Forstmann, an attorney, founded Forstmann Little in 1978 with his brother Nicholas C. Forstmann, who later died of lung cancer, and William Brian Little. Ted Forstmann's second brother, J. Anthony Forstmann, founded ForstmannLeff.

Forstmann has been on the Forbes 400 List of Richest Americans from 1998 to 2005, as well as 2008.

Forstmann Little & Company

Under Forstmann's leadership, Forstmann Little & Company has made 31 acquisitions an significant investments and returned more than $15 billion of profits to investors. In addition to IMG, some of the firm's investments include Gulfstream Aerospace, Dr. Pepper, The Topps Co., Community Health Systems, Ziff Davis, Yankee Candle, General Instrument Corporation, and most recently, Citadel Broadcasting and 24 Hour Fitness.

Economic Forecaster

Critic of junk bonds

He 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. The book portrayed Forstmann as a critic of KKR's Henry Kravis and his investment methods.

Forstmann's criticism of Kravis (and much of the rest of the financial industry during the 1980s) centered on the use of junk bond (high-yield) investments to raise large amounts of capital (Forstmann referred to junk bonds as "wampum"). 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 that built their strategy around high-yield debt.

Credit Crisis

Forstmann accurately predicted the worsening of the credit crisis 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 September 11, 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.^[2]

Education reform

Forstmann has dedicated significant personal resources to the cause of education reform; specifically, he has been a prominent supporter of school choice. He has also been active in the Republican Party.

He was given the "Patron of the Arts Award" by the National Academy of Popular Music at the 1995 Songwriters Hall of Fame induction ceremonies. 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.

Personal life

While already very well known in the business community, Forstmann came to the attention of tabloid readers when he dated actress Elizabeth Hurley following her separation from Hugh Grant in 2000.

In December 2006, newspaper reports on the inquiry into the death of Princess Diana alleged that U.S. intelligence 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.^[3]

Currently, Forstmann is dating Top Chef host Padma Lakshmi.

See also

• Forstmann Little - private equity firm, Ted Forstmann was one of the founders
• IMG - sports agency and management firm where Forstmann is an investor.

References

External links

• "The Inside Story of Ted Forstmann's Wild Ride at Gulfstream" - 1997 BusinessWeek article on Forstmann's transformation of Gulfstream Aerospace
• "A Latter-Day Warbucks, Helping Children" - 1999 New York Times article on Forstmann's efforts to improve education by giving school choice
• 2005 Forbes 400 entry
• 2008 Forbes 400 entry
• "Goodbye to All That" - 2004 New York Times article on Forstmann's planned retirement in 2006.
• Ted Forstmann's Bio

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