Who

Forstmann is a co-founder of the private equity firm Forstmann Little & Co.

Backstory

The son of wool magnate Julius Forstmann, Teddy's a white-shoe man through and through: He attended Greenwich Country Day School, Phillips Academy, Yale, and Columbia Law School before getting his start working for his brother Tony, who founded the firm Forstmann-Leff. In 1978, Ted went off on his own, founding Forstmann Little & Co. with his younger brother, Nick, and partner Brian Little. Six years later he landed on the map when he carried out what was considered one of the boldest buyouts of the time, the acquisition of the also-ran soda company Dr. Pepper. Financing the transaction using his own mezzanine debt fund—a tactic that has since become a common feature of buyouts—many of his peers called him crazy, but Forstmann ended up laughing all the way to the bank, generating a return of over 800 percent when he sold the company two years later.

One of the most prominent buyout kingpins during the '80s, Forstmann memorably battled KKR's Henry Kravis for control of RJR Nabisco in 1988; although Kravis ended up winning the bidding war, Forstmann ended up looked like the wiser mogul after it became clear that Kravis had overpaid. Forstmann's solid track record continued to impress investors throughout the 1990s: The firm earned 60%-plus annual returns following successful buyouts of General Instrument, Citadel Broadcasting, and Ziff Davis. One especially profitable deal: his investment in Gulfstream Aerospace, years before the planes became de rigueur with the mogul set. Forstmann turned a $636 million investment into $3.1 billion following the company's acquisition by General Dynamics.

Of note

Unfortunately for the buyout mogul—and anyone who put money into his fund in the late 1990s—the crash of the tech market sent Forstmann Little up in smoke. Investments in two companies, XO Communications and McLeodUSA, eventually led to losses of more than $2 billion, which would have been bad news under any circumstances, but was compounded by the news that his brother and partner, Nick Forstmann, was suffering from terminal cancer. (He died in 2001.) The losses tarnished Forstmann's rep (and the familial loss was reportedly difficult for him), but the situation got worse when the State of Connecticut filed a very public lawsuit against the fund, claiming that Forstmann Little & Co. had breached its fiduciary duty. A jury agreed—although, surprisingly, it didn't award the state damages—but Forstmann pulled back following the debacle and even suggested he was prepared to throw in the towel.

He's only participated in two major deals since. In 2004, he acquired the talent agency IMG for $750 million and stepped in as CEO, which means the lady-lovin' Forstmann now runs the company that reps Gisele Bundchen and Heidi Klum. A year later, he purchased 24 Hour Fitness for $1.6 billion. Forstmann made a minor appearance in the press in 2007 when he announced that he'd hired former HBO chief Chris Albrecht to serve as his chief deputy at IMG, and revealed plans to have Albrecht oversee a new $250 million fund for investments in media and entertainment content. Albrecht barely lasted a year before getting pushed out of the company.

Keeping score

Forbes pegged his net worth at $1.5 billion in 2008.

Campaign trail

Forstmann has been a very active Republican fundraiser for more than three decades and maintains close ties to major figures in the party. Donald Rumsfeld was once an investor in his fund and served as the CEO of General Instrument after Forstmann bought out the company. Forstmann also appointed Bob Dole and Sam Nunn as board members following his takeover of Community Health Systems. A major campaign fundraiser for George Bush, he also directs cash to the RNC and various conservative political causes such as the CATO Institute.

Pet causes

A member of the board of overseers of the International Rescue Committee, Forstmann appears to take the group's rescue efforts seriously: He once personally traveled on a relief convoy during the war in Bosnia. He's also the co-founder two camps for sick kids, the Benedict-Forstmann Silver Lining Ranch and the Boggy Creek Gang Camp in Florida.

Personal

Forstmann is his late 60s, but he gets around. Most recently he was linked to Padma Lakshmi shortly after her divorce from Salman Rushdie. In the 1990s, he reportedly had flings with actress Elizabeth Hurley and Princess Diana. In conversations tapped by the British Secret Service, Forstmann was overheard making plans with the late Princess to spend a week together with her sons at his Southampton estate in the summer of 1997. (It never came to pass: the British Secret Service deemed taking the princess to Southampton a security risk.) Forstmann is the father of two. In the late 1990s, he adopted two South African boys—Everest and Siya—after traveling to the country to meet with Nelson Mandela.

Habitat

Forstmann lives on Park Avenue in the 80s, and also has homes in Southampton and Beverly Hills. His Hamptons estate, located on "Billionaires Row," is just down the street from David Koch and Henry Kravis. In July 2006, he sold his five-bedroom, 7,415 square-foot Aspen retreat for $16.2 million.