Theodore J. Forstmann—known to his many friends as Teddy—was a business pioneer, a philanthropist, a thought leader and a ladies’ man, and also a fanatical competitor who hated losing, whether in golf, tennis or finance.
But the New York billionaire, who died Sunday at 71 after a six-month bout with incurable brain cancer, also will be remembered for his refusal to accept the clichéd conventions laid down for lesser mortals.
When he played at the 120-year-old Shinnecock Hills Golf Club in Southampton, N.Y., where the use of motorized golf carts is looked upon with disfavor, Forstmann seldom hesitated to gun the engine and speed ahead of other, more tradition-bound golfers. He was, after all, in a hurry and, according to a fellow player, “the rules didn’t apply to Teddy.”
It was a trait that might have discomfited some, but also allowed him to accomplish big things. Forstmann helped invent the leveraged buyout boom of the 1980s—in which private investors took control of vulnerable companies with little cash and large loans, then tried to create efficiencies, and sell them off whole or in pieces for a profit while using company assets to satisfy debts. But he also established a yearly gathering where the planet’s leading intellectuals, artists, industrialists and political leaders could argue issues and ideas off the record in the bucolic setting of Aspen, Colo.
The Forstmann Little & Co. Conference, named after his private equity firm and held over a four-day weekend every September since the mid-1990s, may ultimately turn out to be his enduring legacy.
“He was such a visionary in connecting people,” said longtime conference attendee Mehmet Oz, the cardiothoracic surgeon who hosts daytime television’s popular Dr. Oz Show. “In a way, it was his greatest talent. He created a party around ideas. I guess Teddy was the modern-day equivalent of the folks who hosted salons in Paris in the 1920s. But he did it in a modern, bigger, grander way—uniquely appreciating, really almost predicting, what you need to move to the next big thing.”
Nobel laureate Eric Kandel, who won the prize for medicine in 2000 for his ground-breaking work in brain physiology, recalled being dazzled by the sheer intellectual and political firepower of Forstmann’s Aspen gathering, which in recent years has attracted Nelson Mandela, Tony Blair, Colin Powell, Dick Cheney, the late Benazir Bhutto, King Abdullah of Jordan, and the leading lights of business, academia and the arts.
“Teddy’s intellectual accomplishments were monumental in the sense of bringing together so many of the greatest leaders in the world,” said Kandel, adding that the discussions, led by television interviewer Charlie Rose, have been consistently invigorating (and the fact that Forstmann arranged his travel by private jet also had its charms). “This conference should be continued,” Kandel said, “but whether it will be without Teddy, I don’t know.”
Elizabeth Lack, whose husband, Andrew, runs Bloomberg Television, has helped organize Forstmann’s conference for the past two decades. “He loved bringing together people who were smart and influential and diverse for a weekend of intelligent discussion and fun,” she emailed The Daily Beast. “He always said—which was true—that unlike other conferences, there was no agenda, no business purpose…. And over the years, all these people entered Teddy’s orbit, kept coming year after year and were much the better for it.”
Forstmann, who grew up privileged in the gilded suburb of Greenwich, Conn., was an establishment Republican. His taste for being seen with glamorous and famous women—including Elizabeth Hurley, Princess Diana, and, for the past few years, Padma Lakshmi, who stuck by him until the end—belied his serious involvement in public policy and philanthropy. He was especially interested in public education, and supported vouchers and charter schools as a way of offering parents and students a chance for better quality. And despite his ambition and occasionally sharp demeanor, he also had a soft side—for instance, adopting two young boys (now adults) on a visit to South Africa to meet with President Mandela.
“There were more people that Teddy helped, in one way or another, that nobody knew about—and he did it as an act from his heart,” said Charlie Rose, who became a close friend after Forstmann asked him to moderate the conference panels in Aspen a dozen years ago. “There were people who were sick, and he’d pay their medical bills, people he’d send to college, and he didn’t publicize it or ask for credit.”
It was a testament to Forstmann’s capacity for open-mindedness that he also counted among his good friends such disparate personalities as former Disney chairman and chief executive Michael Eisner, a staunch Democrat, and right-wing bomb thrower Ann Coulter.
“He was a great man,” said Coulter, who grudgingly accepted Forstmann’s dinner invitation after he read Slander, her best-selling 2002 polemic against alleged liberal lies. “I could never see the point of meeting rich people unless they were going to hand me money at dinner—until everyone I knew told me he was different and I should meet him. So we had dinner a few times and became friends.”
Coulter called Forstmann’s death “a great loss to his family and friends, as well as the country, but I’m sure he shot like a rocket to heaven.”
Measuring the loss, Eisner compared Forstmann to an equally stubborn visionary who recently died before his time—Apple’s Steve Jobs.
“It’s ironic the way we’ve seen a couple of very important business leaders die in the last couple of weeks,” Eisner told The Daily Beast. “In each of their deaths was a battle for survival. And they both—Steve Jobs and Teddy Forstmann—were constantly in a battle for survival, and doing it their own way.”
Eisner quoted Dylan Thomas:
Do not go gentle into that good night,
Old age should burn and rage at close of day;
Rage, rage against the dying of the light.
“Here were two gifted men, raging against the fact that they were not going to be able to perform anymore,” Eisner added. “But in fact they also raged against conventional wisdom.”
After he lost the 1989 bidding war for RJR Nabisco to rival leveraged-buyout prince Henry Kravis, whose $30 billion offer was financed with junk bonds, Fortsmann became a vocal critic of the risky financial instruments, calling them “funny money” and “wampum.” He coined the term “Barbarians at the Gate,” which ended up as the title of the best-selling book about the RJR Nabisco episode.
“He was pretty unique in that he fought against the whole junk-bond craze of the 1980s—the super-leveraging through junk bonds,” Eisner said. “And he was amazingly successful going the more reasonable, more financially ethical route… In today’s terms, that would be as though somebody said, ‘Oh no, we’re not going to do derivatives and we’re not going to do over-leveraging and we’re not going to give loans to anybody who’s breathing.’ ”
Another longtime Forstmann friend, New York Mayor Mike Bloomberg, told The Daily Beast that Forstmann “always thought he should take care of each company when he bought one. He didn’t view it as just a financial transaction. He viewed companies as things to be owned for the long term.”
Bloomberg, a self-made multi-billionaire who built an eponymous media and financial-information empire, recalled that when Forstmann acquired the troubled Gulfstream Aerospace Co. in 1990, “It was personal for him. He was a part of it. He got on the phone and made the sales calls, and he talked to the people who made the planes.” With focus and persistence, Forstmann’s hands-on management style caused the corporate jet-maker to soar.
Leveraged-buyout practitioner Jeffrey Leeds said, “Teddy viewed himself more as an industrialist, more deeply involved with companies, and less of a financial engineer.” Leeds added that Forstmann was “a true pioneer of private equity” who “remained committed to a cerebral way of thinking about business.”
According to Mike Bloomberg and Mehmet Oz, Forstmann faced his perilous prognosis with a combination of realism and optimism—and his typical thirst for information—after receiving the shocking diagnosis in May. After consulting every conceivable expert, he underwent surgery and radiation treatments. But it didn’t prevent the inevitable.
“Diana and I had dinner with Teddy maybe three months ago,” Bloomberg said, referring to his girlfriend, Diana Taylor. “It took him five minutes to walk from the front door of the restaurant to the table. Padma was with him at the beginning, but she had to go to some event. Padma took care of him and was his confidant. People said he wouldn’t have a drink and he wouldn’t eat. But not only did we sit with him for two hours, he ate and he had some drinks. He talked about the future. He knew he was facing a tough situation and the odds weren’t good.”
Oz recounted: “He was very sanguine but he was a realist. He very appropriately went out and got every single idea, and left no stone unturned, and every single person in the field was interviewed. And Teddy, with his curiosity and information-gathering ability, found out everything he could.”
There was, alas, no good news. “When I visited him, even when he was most uncomfortable, and he’d had a difficult night, you could see he was peaceful about a lot of things,” Oz said. “He was an optimist to the end. He felt good about the life he had lived. He had done what he wanted to do in life. And to me that was a big lesson.”