Forstmann: PE Firms Will Take Place of I-Banks

Ted Forstmann has been railing against the evils of credit since before KKR levered up RJR Nabisco, so it’s no surprise that he’s speaking out about the current crisis. In a recent interview with Charlie Rose, Forstmann puts the blame on Fed policies that helped create a culture of “easy money.”

Forstmann is an interesting position, because he began winding down his private equity firm, Forstmann Little & Co., before the boom really began. The shop still officially exists, but it operates on a skeleton staff and hasn’t done a new deal since the 2004 acquisition of talent agency IMG.

Favorite moment is when Rose asks Forstmann if private equity firms are “a good thing.” Forstmann takes a long pause, before saying “Yeah I do… Depends on which ones.” You might think he’s slamming longtime nemesis KKR here, but he instead lauds the firm before saying what KKR has been thinking since originally filing for its un-IPO: “I think [private equity firms] are going to take the place of the investment banks.”