Theodore J. Forstmann ’65 was a renowned private equity investor, philanthropist, and pioneer in the leveraged-buyout industry. He passed away on November 20, 2011, at the age of 71.
Forstmann, who was owner and chairman of the sports marketing firm IMG Worldwide at the time of his death, rose to Wall Street prominence in the 1970s and 1980s by acquiring struggling companies, turning them around, and reselling them for a profit. The grandson of a German-born wool mogul, Forstmann grew up in Greenwich, Conn. By the time Forstmann enrolled at Columbia Law School in 1962, the company his father inherited—Forstmann Woolen Co.—had failed. He financed his Law School education by winning big at bridge.
After graduation, Forstmann practiced law in Manhattan and worked at several small Wall Street firms before co-launching the investment firm Forstmann Little in 1978. During the next several decades, the company earned more than $15 billion for investors thanks in part to successful turnarounds of companies such as Dr. Pepper and Gulfstream Aerospace.
A fervent critic of excessive leverage, Forstmann displayed prescience in predicting the collapse of the junk-bond market in the 1980s and the worsening of the financial crisis in 2008.
Forstmann was as passionate about philanthropy as he was about business. He donated hundreds of millions of dollars to charity over his lifetime, establishing educational programs for economically disadvantaged youth and medical programs for war-injured children, among other initiatives. Together with fellow billionaires such as Bill Gates, Michael Bloomberg, and Warren Buffet, he also committed himself to The Giving Pledge, a drive by the nation’s wealthiest people to dedicate most of their fortunes to charity.
Forstmann is survived by his two sons, Siya and Everest; his brothers J. Anthony and John; and his sisters, Marina and Elissa.