NEW YORK — A pioneer of the leveraged-buyout business, celebrity bachelor and free-market proselytizer, Theodore Forstmann cut the figure of a swashbuckling risk taker.

But in buying companies, Mr. Forstmann, who died Sunday of brain cancer at the age of 71, tended to be more careful and conservative than did rivals.

Famously, he backed down from buying RJR Nabisco in 1988 when the price got too high. His instincts turned out right. The winner, Kohlberg Kravis Roberts, struggled for years to wring profits from the company.

Mr. Forstmann was the senior founding partner of investment firm Forstmann Little & Co., one of Wall Street's most successful specialists in leveraged buyouts, deals financed mostly with debt.

The company completed dozens of such deals to purchase a wide array of companies, including Dr Pepper, baseball-card maker Topps, Gulfstream Aerospace and Ziff-Davis Publishing.

Forstmann Little's leveraged buyouts generated lofty returns for its partners and outside investors, which included many corporate pension funds.

In a 1996 interview with The Associated Press, Mr. Forstmann said his interest in deal making was sparked in childhood, while reading a biography of Howard Hughes. "This guy loved doing deals," Mr. Forstmann said of Hughes.

Mr. Forstmann was often seen with celebrities, and dated a few, too, although he never married. Two names romantically linked to him: Elizabeth Hurley, the model and actress, and Padma Lakshmi, the TV host and cookbook author.

He was also a big Republican party supporter. He wanted free markets to help reform education. To help bring market-based solutions in government, he helped fund the education of "Forstmann Scholars" at the Pepperdine School of Public Policy.

Mr. Forstmann was a complex, brilliant person who was the quintessential entrepreneur, said Michael Dolan, president and chief operating officer of IMG, the sports-marketing giant where Mr. Forstmann served as chairman and CEO after acquiring the company in 2004. IMG released the statement about his death.

Mr. Forstmann would remember numbers for years and had the ability to spot a company's potential, no matter whether it marketed athletes or made aircraft or soft drinks, Dolan said Sunday in an interview with The Associated Press.

"He had no problem jumping into an opportunity," Dolan said. "That's what makes an entrepreneur, someone who sees something that other people don't see and says 'I'm going to go after this.' "

Mr. Forstmann eventually became a big critic of the industry he helped create. In the late 1980s, he lit into rivals for the risky way they financed their acquisitions. They would borrow money from investors in junk bonds. Those bonds are IOUs issued by the riskiest companies.

Later, he complained that there were simply too many people in the takeover business. The result: Buyout firms were paying sky-high prices for their targets to beat competitors, and so might have trouble wringing profits out of the deals.

He turned out right again — but maybe not in the way he imagined. In the tech mania of the late 1990s, Mr. Forstmann himself ended up overpaying for two firms — XO Communications and McLeodUSA. Both eventually filed for bankruptcy.

During the furious bidding for RJR Nabisco in the fall of 1988, Mr. Forstmann's protestations about the rampant use of expensive junk bonds — which carried interest rates sometimes as high as 18 percent — were ignored. Rival takeover firm Kohlberg Kravis Roberts ended up buying RJR in what was then the biggest takeover in U.S. history.

KKR's $24.5 billion purchase of the food and tobacco giant was announced in November of that year after a bidding brawl that some considered a symbol of corporate gluttony.

Mr. Forstmann, who cited Nelson Mandela and Abraham Lincoln as his heroes, was a philanthropist and co-founder of the Children's Scholarship Fund in 1998, which focuses on helping parents send their children to schools of their choice.

He signed "The Giving Pledge" earlier this year (an effort started by Bill and Melinda Gates and Warren Buffett), in which America's wealthiest people pledge to give away at least half of their fortunes.

Forbes estimated Mr. Forstmann's net worth at $1.8 billion.