What's Bigger Than Cisco, Coke, Or McDonald's?

Steve Feinberg's Cerberus, a vast hedge fund that's snapping up companies -- lots of them

Shares of Albertson's Inc. (ABS ) were soaring in mid-September on rumors of an impending bid for the Boise (Idaho) grocery chain. A pair of private-equity funds -- giant pools of capital just waiting to pounce on takeover targets -- had been circling, preparing offers that were said to top $16 billion. But then a new player showed up: hedge-fund group Cerberus. The Albertson's drama is still playing out. But even as Cerberus Capital Management LP pursues the grocer, it has been quietly discussing an offer for Morgan Stanley's (MWD ) aircraft-leasing business for up to $2 billion and negotiating for a big stake in Israel's second-largest bank, Bank Leumi. And it's still digesting a $2.3 billion purchase in May of Meadwestvaco Corp.'s (MWV ) paper businesses -- a deal that included 900,000 acres of forest.