He is one of the founding partners of Forstmann-Leff & Associates, one of the first hedge funds in the United States, along with Joel B. Leff.

The firm's clients included Intel, Pfizer, Standard Oil of Indiana, The Pension Guarantee Corp.

The Ford Family, Northrop, Honeywell, Lockheed, Northwest Airlines, Knight Ridder, Delta Air Lines, Texas Instruments, Raychem, Studebaker, Chrysler, Commercial Credit, Primerica, MCA Universal, the City of New York, the State of Minnesota, the State of Maine, the College of the Holy Cross, and the Archdiocese of New York.

In 1985, Forstmann started The Huggy Bear tennis tournament in Southampton, NY which evolved over 22 years into a major fund raising event for children's charities.

Forstmann's brothers Ted and Nick joined forces in 1989 and the tournament ran for 22 years, raising millions of dollars for children globally.