Financial high-flier Teddy Forstmann got the jitters last month when his plush Gulfstream IV, the Rolls Royce of private jets, hit a patch of turbulence at 40,000 feet. A look of fear crossed his wide face, and he grabbed instinctively for the overhead handrail.

"I'm a nervous flier," he said.

Theodore J. Forstmann also is a nervous investor, and that trait has has helped make him the American dealmaker of the 1990s. By Wall Street standards, Forstmann is obsessively worried about what can go wrong with a deal. Yet the approach works for him.

While many of the leveraged buyout aces of the 1980s have crashed and burned in the '90s, Forstmann has soared. His investment firm, Forstmann Little & Co., has the best performance record of any major buyout boutique -- and consequently has been able to raise more money to do big deals than anyone, including longtime rival Henry Kravis. Forstmann's net worth has grown to roughly $400 million, according to business associates.

U.S. pension funds and wealthy individuals who have invested in the common stock of Forstmann-controlled companies since 1978 have earned an average annual profit of 56 percent, net of all fees and profits taken by Forstmann Little. Those who have invested in the bonds of the companies Forstmann has acquired since 1982 have received an 18.5 percent annual profit, net of all fees.

Forstmann this month will finish raising nearly $2 billion from his investors for new deals. Forstmann Little's coffers were largely depleted by last year's acquisitions of computer magazine publisher Ziff-Davis Publishing and wood stain and sealant manufacturer Thompson Minwax Co. The new cash will give him buying power of about $3 billion when you add the money he can borrow from banks.

Forstmann is finally getting the kind of public acceptance that eluded him in the 1980s, when he was widely viewed on Wall Street as a self-serving, moralistic crank.

Then, Forstmann publicly criticized rivals such as Kravis, who used junk bonds -- or "wampum," as Forstmann used to say -- to finance their deals. He boasted that he, unlike his rivals, did not stoop to borrowing money via high-interest rate junk bonds.

That is not to say he didn't borrow huge amounts of money. He was, after all a leveraged-buyout investor.

But Forstmann differed from his competitors in that he borrowed low-interest money from a small band of sophisticated investors who also tended to own stock in the company being acquired. He essentially designed a less debt-heavy capital structure -- that would be less burdensome if the company didn't make the expected profits. {Only one of his companies has gone bankrupt, Pullman Co., and it was the only one to have had junk bonds outstanding that could not be refinanced when Forstmann bought it.}

Today, Forstmann feels vindicated, and says he has never been more excited by his business. "I may be 55, but I feel 33," he enthused.

He is less thrilled, however, with his personal life.

Forstmann rattles around in the kind of streamlined isolation available only to bachelor multimillionaires. He can spend an entire day -- beginning at his Fifth Avenue apartment and moving from the chauffeured black BMW sedan to the 54th-floor office, the private helicopter, the private jet, and home again -- without having to speak to anyone who doesn't work for him.

"There is some isolation in my life. Isolation is something that comes with this sort of life," he said. "My life is a work in progress. What is defined and definable is the Forstmann Little part of it. The rest of it, to be honest, has yet to happen."

Like a perpetual adolescent, Forstmann has never married and has no children. Instead, he has spent the years with a succession of beautiful young girlfriends, each one "the babe of the moment," he says. Among his high-profile dates: Lady Diana, the princess of Wales, who accompanied him to a dinner last fall in Washington. His current girlfriend is an acting student.

Forstmann said his mother, the hard-driving 84-year old matriarch of the family, would like to see him get hitched and have a family. He wants children, he said, but not necessarily a wife.

"I find the prospect of being married more difficult than most people. I would be a difficult husband," he said. "Maybe I'll adopt some children. I'm not going to do nothing about this. I will have a kid or two. But I can't have Steve Rattner {an investment banker at Lazard Freres & Co. who presented the Ziff-Davis deal} come over with a wife. He's not going to come over and say, Instead of Ziff-Davis, this week I have a wife for you.' " A Family of Firms For the moment, Forstmann's real babies are his firm and the eight companies it owns.

On this day, Forstmann is focused on Gulfstream Aerospace Corp., the nation's premier maker of private jets, based in Savannah, Ga. Forstmann Little bought Gulfstream in 1990 and until recently it has given him nothing but trouble -- losing money and market share to competitors.

"There was never any problem with the product," the Gulfstream IV, he said. "It is the fastest, safest, {it} can travel the farthest, gets to altitude the fastest. It is the best plane. But management wasn't very good and after we took over, we made it worse."

Forstmann blamed other people for the troubles at Gulfstream. He criticized two partners, including founding partner W. Brian Little, who was responsible for supervising the firm's investment in Gulfstream. But he admits that he and other partners sat on the Gulfstream board, which should have alerted them to its problems.

Forstmann said his two partners, who have since left the firm, allowed Gulfstream's manufacturing costs to remain out of control. He said they also tolerated a weak marketing effort in the face of stiff price competition from the Canadair Group unit of Bombardier Inc. in Montreal and France's Dassault Aviation. In addition, he said, Gulfstream management dramatically underestimated the costs of developing Gulfstream's next jet, the G-V.

Little didn't respond to a request for comment; his secretary said he was traveling in Europe.

By 1993, Forstmann was faced with a dilemma: Should he admit that he paid too much for Gulfstream and get out with an embarrassing loss in the range of $300 million? Or should he try to fix the problems?

He asked for an analysis from another of his general partners, Sandra J. Horbach. After three months, Horbach delivered a report that concluded Gulfstream had many problems but that they were amenable to strong leadership and financial restructuring. The problems, she said, were due to mismanagement.

Forstmann immediately asked his limited partners -- which include the pension funds of AT&T Corp., General Electric Co., GTE Corp., International Business Machines Corp. and Boeing Co. -- to convert the Gulfstream bonds they had bought into riskier common shares in the company. That way, Gulfstream could cut its interest costs by $40 million. In exchange for giving Gulfstream breathing room and staving off bankruptcy, Forstmann explained, his limited partners would reap a bigger payoff once Gulfstream returned to profitability.

In short order, Forstmann named himself chairman of Gulfstream. "My lawyer told me, You will become chairman of this company over my dead body.' He didn't want me to have any personal liability if the company went bankrupt," Forstmann explained. "I had no anxiety about naming myself chairman. I love these kind of challenges. People say, You've never run a company.' Well, what was Forstmann Little back in 1978? I had never done that, either."

He pushed out the company's chief executive, William C. Lowe, and brought in a cadre of manufacturing experts from General Electric and marketing whizzes from the competition.

Gulfstream's new managers have cut another $40 million from the company's annual operating costs and revived its sales and marketing effort. Plane Talk Forstmann, who is known on Wall Street as a master money-raiser, has proved to be a pretty effective plane salesman as well, talking "CEO-to-CEO" to move the merchandise.

Forstmann related how he convinced the head of a Fortune 500 company based in New York City to buy a Gulfstream instead of a less expensive jet from Canadair. "I called and said, I thought you had a big successful business.' So he says, What do you mean by that? We don't need a G-IV. It's too expensive.' I talk about safety and reliability, about how nervous a flier I am, about how he and his family would be traveling aboard the plane," Forstmann said.

"I got one more call from the guy," he recalled. "He said, I've looked into the matter and your plane is more expensive.' I said, Goddammit, we went through this. Of course, it's more expensive. It's better.'

"I knew I had a sale when I said, You can't get a deal on a Mercedes like you can on a Ford, and he said, Well, I want a deal.' " according to Forstmann. "We crapped around and knocked $750,000 off the price, {a discount} which is always built in anyhow."

Today, Gulfstream is in far better shape. The company sold more planes last year than ever before, and in 1994, earned $60 million before taxes (after deducting research and development expenses for the G-V) compared with a loss the previous year.

And in November, the company will unveil the G-V, an ultra-long-range jet capable of flying nonstop from Washington to Tokyo.

The plane costs $35 million and requires a $2 million, nonrefundable, upfront deposit. The first G-V will be delivered to Seagram Co. in late 1996 after it receives FAA certification. That is about two years before Canadair is expected to come to market with its long-range Global Express. Gulfstream claims to have $2 billion in "firm" orders for the G-V, or 55 to 60 jets.

At a recent management committee meeting in Savannah, Forstmann, Horbach and Gulfstream's top four executives discussed how to exploit the company's lead at the Paris Air Show, which begins next week.

"We are four months away from first flight on the G-V. I think we should be phenomenally aggressive in Paris. What are we planning to do to demolish the competition?" he exhorted his managers. "This should not be business as usual."

With Teddy Forstmann, it rarely is. CAPTION: MEET TED FORSTMANN

Name: Theodore Julius Forstmann Age: 55 Position: Senior partner, Forstmann Little & Co. Religion: Roman Catholic Hometown: Greenwich, Conn. Education: Yale College, B.A., English literature Family: Single Residences: Manhattan, Southampton, L.I., Aspen, Colo., and Beverly Hills, Calif. Politics: Republican Credo: "Once I decide to do something, I want to win in the worst way. I will do anything within the law to win." Favorite sports: Golf, tennis and deals. Pet peeve: "I have an idea that the little people are always being screwed in life. What {angered me} . . . about junk bonds was not that Mike Milken made $1 billion. That would be great if he were doing something worthwhile. But what was happening was that all kinds of little people were sucked into investing in this crap and ended up losing a lot of money." Business advisers: James E. Burke, former chairman of Johnson & Johnson; Drew Lewis, chairman of Union Pacific Corp. and former secretary of transportation; Michael A. Miles, former chairman of Philip Morris Cos; Donald H. Rumsfeld, former secretary of defense; John Sculley, former chairman of Apple Computer Inc.; George P. Shultz, former secretary of state; Paul G. Stern, former chairman of Northern Telecom Ltd., and Robert S. Strauss, partner at Akin, Gump, Strauss, Hauer & Feld. Latest book read: "Pope John Paul II," by Tad Szulc. Refuses to: Fly on commercial airlines. "They aren't safe."