Theodore “Ted” Forstmann, whose firm Forstmann Little & Co. was involved in some of the most influential deals in private equity history, has died.
Although he held the post of chairman and chief executive of sports marketing group IMG Worlwide in recent years, he will be remembered in particular for founding and running Forstmann Little, one of the most influential firms in the early years of the buyout industry.
Forstmann Little, launched in 1978 by Forstmann, his brother Nick and friend Brian Little, took part in some of the industry's marquee deals including bidding on the landmark RJR Nabisco deal, which was ultimately won by Kohlberg Kravis Roberts.
He also came out with one of the most memorable monikers for private equity investment groups, calling rivals who he considered over-reliant on junk bonds “barbarians at the gate” – a term that was later used as the title for the prize-winning novel about KKR's RJR Nabisco deal.
Other investments included private jet manufacturer Gulfstream Aerospace, cable TV company General Instrument, soft drink brand Dr Pepper, and baseball card-maker Topps.
In 2004 however, Forstmann announced he would cease to make new investments after two Forstmann Little portfolio companies went bust, losing the firm and its investors about $1.5 billion. The investments, XO Communications and McLeodUSA, tarnished an otherwise stellar track record.
Forstmann was also a dedicated philanthropist. In 1998, he co-founded the Children's Scholarship Fund, a charity helping parents to send their children to schools of their choice. He was a director of the International Rescue Committee, and was a trustee of the Nelson Mandel Children's Fund. He founded two camps in the US for chronically ill children – the Benedict-Forstmann Silver Lining Ranch and the Boggy Creek Gang Camp. Other charitable directorships included Freedom House, Empower America, The Robin Hood Foundation, the CATO Institute, and the Preventative Medicine Research Institute.
He is survived by two adopted sons, Siya and Everest, brothers Anthony and John, and sisters Marina and Elissa.
His family has invited well-wishers to consider donations to the Children's Scholarship Fund (www.scholarshipfund.org) in lieu of flowers.