He was the son of Dorothy (née Mercadante) and Julius Forstmann, who ran a wool business that went bankrupt in 1958.

He then played goalie on the ice hockey team at Yale University where he was a member of Delta Kappa Epsilon fraternity.

Forstmann later attended Columbia Law School where he earned a Juris Doctor, which he financed through gambling proceeds.

In addition to IMG, some of the firm's investments included Gulfstream Aerospace, Dr. Pepper, Topps, Stanadyne Corp., Community Health Systems, Ziff Davis, Yankee Candle, General Instrument Corporation, and most recently, Citadel Broadcasting and 24 Hour Fitness.

The term became part of Wall Street lore and was connected inseparably to the private equity industry that Forstmann pioneered and flourished in.

[11] Forstmann's criticism of Kravis (and much of the rest of the financial industry during the 1980s) centered on the issuance of high yield "junk" bonds to finance mergers and acquisitions.

Forstmann argued that the excess of money pumped into the economy after the September 11 attacks in 2001 distorted the decision-making abilities of nearly everyone in finance.

While this allowed many to make money for a time, eventually this risk accumulated, and the consequences led to the credit crisis.

[12] In 1995, Forstmann was given the "Patron of the Arts Award" by the National Academy of Popular Music at the Songwriters Hall of Fame induction ceremonies.