That might be a noble aim, but Cerberus’ guiding mission is to create returns that beat the market without incurring high risk for its investors. “Cerberus is a very pure place,” a former employee says. “You are there to make money.” Stripping is an integral part of the game, and Cerberus excels at it. Its purchase of Albertsons provides a revealing case study. After buying 661 underperforming Albertsons grocery stores for more than $1 billion in June 2006, Cerberus quickly started selling them off. In February 2007, it made back more than half its investment by unloading 128 stores on Save Mart Supermarkets. By May, the portfolio was down to 358 stores, and Cerberus is still looking for buyers. Then there’s EntreCap, formerly the leasing arm of Pitney Bowes. Feinberg spent almost two years negotiating a $747 million purchase of the division. Shortly after the acquisition in July 2006, Feinberg & Co. decided to wind it down. First, Cerberus refinanced EntreCap, earning back its entire $77 million equity position. Then it sold off various assets and portfolios, raking in a $300 million gain in less than a year. Cerberus expects to make another $150 million when it sells the rest of the company’s assets.

Feinberg finishes his analysis of the investment market and moves on to an explanation of the culture inside Cerberus. He wears a gray suit and speaks in a raw, suburban-New York accent. The only sign of polish is a small white pocket square. “There’s a sense of, What can we do today?” he says. “Past returns are sort of irrelevant. There’s no resting on our laurels. That’s the first rule for everyone at our shop. The minute that changes, we’re in trouble. No one person or two or three people are irreplaceable. Including me.”

Still, he does call out two people by name: former vice president Dan Quayle and former Treasury secretary John Snow, stalwart Republicans whom he tapped to be Cerberus’ co-chairmen. Quayle may not be much admired in his own country, but he’s big in Asia, where he has helped close several deals. Feinberg has recently dispatched Snow to D.C. to lobby against any increase in fuel-economy standards for automobiles. (The last thing he needs is to have to retool Chrysler plants to make new engines and lighter bodies.)

“You know, with other firms, Dan Quayle’s and John Snow’s roles would not be full-time jobs,” Feinberg continues. “In our case, John and Dan work full-time, killing themselves. They work as hard as our people. Sometimes I worry about them. I think John is 68 now, but he has the energy of a 30-year-old. Our rule is that there’s the same set of rules for everybody. We sometimes lose senior executives because of that.”

When seen from the air, Greenwich, Connecticut, resembles a tableau of tiny fiefdoms: sprawling homes of the hedge fund and private equity kings, woodlands buffering each regal spread. They pass each other as they drive in and out of their country clubs. Stephen Feinberg has every right to be here. Instead, his house sits 15 miles away and could pass for a Greenwich guest cottage: a 4,500-square-foot, blue, two-story house that sits among seven other similar residences in a modest cul-de-sac. He bought his home 16 years ago for less than $600,000.

Feinberg has worked hard to stay anchored to his roots. He grew up less than an hour away in the middle-class town of Spring Valley, New York, where his father worked as a steel salesman. In high school, Feinberg threw himself into tennis, spending late hours cheering on teammates even after his own matches were over. Feinberg’s mother, Madeleine, died while he was a sophomore at Princeton; he later named one of Cerberus’ lending operations Madeleine L.L.C.

He played tennis in college, where his intensity only increased: At times he would come onto the court wearing eye black, to the puzzlement of the rest of the players. By his senior year, he had become team captain and was named All-Ivy in doubles. “I was the Southern evangelical Protestant; he was this Northeastern Jewish guy,” recalled his doubles partner, Talbot Davis, now a pastor in Charlotte, North Carolina. “We had a lot of heated conversations about religion and politics, but in the end, we still really loved each other. He was so passionate. Everything he did was intense. He could be sick sometimes and not practice well but go out on the court and still be amazing.”

Feinberg also served in R.O.T.C., a ­biographical detail that took on a life of its own when he later rose in the business world. One competitor talks about Feinberg’s years as an Army sharpshooter; a former employee says that he thought Feinberg used to jump out of helicopters with Special Forces. According to Department of Defense ­records, however, Feinberg’s service ended midway through his senior year. Though his stint was short, he served with his usual focus. When a classmate mentioned that he was having trouble with his marching, Feinberg insisted that the two practice immediately—even though they were in the library. “People probably thought we were wacko,” said the marcher, Dan Sykes, who now manages a small education company. “Steve didn’t care. He was a get-it-done person, and he wanted to get it done.”

After school, in 1982, Feinberg joined Drexel Burnham Lambert, the junk-bond shop that would help define the Wall Street years, before it came to an ignominious end when its star, Michael Milken, was convicted of illegal securities trading. Later, Feinberg jumped to the brokerage house Gruntal & Co. In 1992, at 32, he teamed up with Bill Richter, 17 years his senior and the founder of his own investment firm, to start Cerberus. They named their new company after the three-headed dog that guards the gates of hell in Greek mythology. The company has long held that the symbolism refers to the fact that one eye is always open, presumably protecting investors’ money. Tim Price recently told New York Times language columnist William Safire that the founders just thought the name sounded “pretty cool.” Price added, “Now, frankly, we’re torn. It’s a terrible brand name, but we have a ton of equity in it. What to do?”

In the early days, long hours meant Feinberg had little time to see his wife, Gisela, or his young daughters; he now has three. Though the family splits time between the home in Connecticut and an Upper East Side co-op, he clings to the ideals of middle-class life. He reportedly drives a Ford pickup truck and avoids the Manhattan social circuit. The idea of throwing himself a lavish party—say, the way Blackstone’s Stephen Schwarzman did on his 60th birthday—is completely alien to Feinberg.