PE Giant Ted Forstmann Dies at 71
There are very few people in the business of finance whom I actually admire (conversely, there are dozens I downright loathe), and yesterday that list got a little shorter. Forstmann, Little founder and LBO pioneer Ted Forstmann died at age 71 from brain cancer. The man who coined the term "Barbarians at the Gate" was famous for being the lone voice of reason during the junk bond frenzy of the 1980's.
Ted Forstmann had a wild ride. From financing law school with gambling winnings to turning around multi-billion dollar companies to waking up next to models, actresses, and even a princess, Ted made it all look easy. And through it all he maintained his principles, never yielding to the quick buck that took down so many of his contemporaries.
He never married. (I'm pretty sure there's a Pro Tip somewhere in that last sentence.) But he adopted two boys from South Africa and raised them as his sons. He gave hundreds of millions away to various charities, and even signed the Giving Pledge earlier this year, promising to give away half or more of his total net worth upon his death. His support for charter schools and education reform was his passion, and the fund he started with $50 million of his own money has since provided $443 million in scholarships to underprivileged kids.
In short, Ted Forstmann did it right. If you're looking for someone to emulate, you could do far worse. This was a guy who got it done, but never lost his love of a good time. His funds returned a staggering 55% annual average from the late 70's to 2001. He spent the past seven years as the Chairman of talent juggernaut IMG.
Thanks to the movie, he'll always best be known for his rivalry with Henry Kravis of KKR over the RJR Nabisco deal. Who could forget David Rasche's performance of a manic Ted dressed up as an Indian desperately trying to woo Ross Johnson at a costume party?
We definitely lost another one of the good guys. And 71 seems far too young, though cancer does run in his family (his brother and co-founder of Forstmann, Little died of lung cancer at 54). I have no doubt that this man's funeral will be well attended.
Rest in peace, Teddy.
From the Barbarians At the Gate book: "We are not the raiders. We are real, actual investors, with real, actual money." He got a standing ovation from the board of directors he was addressing at the time.
RIP indeed.
Great post. Definitely a stand up guy.
true philanthropist RIP teddy
Great story. Interesting how he piddled around for a while after going to college / before going to law school. Shows that (although he had family $) success is more determined by the individual and their drive / knowledge, rather than some predefined career path (IB analyst out of college --> PE --> MBA) as so many on this board seem to think.
Keep in mind he did this back in the 60s or 70s or whenever. Things were quite different back then. There wasn't really a pre-defined finance track and things were a LOT less competitive. Yes there are other ways to be successful without getting on "the track" but if finance is your game then a Forstmann style trajectory is simply not an option in 2011.
Actually, nothing could be further from the truth.
For the record, Ted didn't found Forstmann, Little until 1978, so he kicked ass all through the 80's and 90's - hardly ancient history. He built the business model under which the current PE world exists.
As for "the track", I see more and more signs every day that "the track" is over with. Not that it won't continue to exist - it will - but the pay 10 years from now will be an absolute joke. Entry-level investment banking is going the way of the stockbroker. In 1992 we averaged $118,000; today stockbrokers average around $30,000.
The only way to guarantee ballership going forward is to innovate - which is exactly what Ted did.
the epitome of cool
The guy was a total stud.
A truly successful man does not need marriage, which is an institution that binds men and stifles their freedom and creativity.
I've thought about marriage and honesty a lot over the past few years.... I've come to the conclusion that stand-up, honest men can never really marry.
Don't know what his jobs where but sounds as though his pedigree is as "target" as it gets (primary and secondary schooling are the icing on the cake)
Greenwich Country Day School
http://www.charlierose.com/view/interview/9332
Charlie Rose Interview from Oct 29, 2008. Worth the time.
Rest in Peace, Ted Forstmann (Originally Posted: 11/20/2011)
"Ted Forstmann, the Wall Street dealmaker who sounded the alarm in the 1980s when junk bonds reshaped the leveraged-buyout industry he had helped create, has died. He was 71."
I actually learned about Mr. Forstmann while I was reading Barbarians at the Gate. I finished the book a week ago and really liked it. He was one of the pioneers of Private Equity
http://en.wikipedia.org/wiki/Theodore_J._Forstmann
Just saw the news as well.
http://dealbook.nytimes.com/2011/11/20/theodore-forstmann-private-equit…
http://dealbook.nytimes.com/2011/11/20/remembering-teddy-forstmann/
I hate looking at the owner of wikipedia every time i go to that site. Guy's face freaks me out.
Man adopted 2 kids from Africa. Seem to be a man with both a mind and a heart to me. R.I.P
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