Forstmann Little & Co

Forstmann Little & Company was an American private equity firm specializing in leveraged buyouts (LBOs), founded in 1978 by Ted and Nick Forstmann and Brian Little. The firm was known for its investment philosophy focused on acquiring or investing in high-quality, high-growth companies primarily through significant capital from pension funds and wealthy individuals. Their strategy involved converting public companies to private ownership, and they became notable for avoiding high-yield, risky "junk bonds" in their financing. The firm made over 30 acquisitions, achieving profits exceeding $14 billion, but ultimately the firm was defunct by 2015 after a series of successes and failures, including investments in Gulfstream Aerospace and 24 Hour Fitness. Noteworthy accomplishments include an average compounded annual return of 85% in the 1980s for equity-fund partners and significant acquisitions such as Dr. Pepper Co. and Lear Siegler, Inc. However, they also faced legal challenges related to losses from telecom investments.