(FORTUNE Magazine) – Like the summer of 1998, when Mark McGwire and Sammy Sosa battled for Roger Maris's home-run crown, the past year has been one when private-equity firms have been gunning for Kohlberg Kravis Roberts's claim to the biggest LBO of all time: 1989's $25 billion RJR Nabisco deal. In July, KKR, working in concert with Bain Capital and Merrill Lynch, announced a $33 billion buyout of Hospital Corp. of America, only to be topped seven months later by Blackstone's buyout of Equity Office Properties for $38.9 billion. Biggest isn't always best, so FORTUNE decided to examine the firms remaking the corporate landscape. Rather than letting them rest on their laurels, our list—based on recent private-equity fundraising—examines which U.S.-based dealmakers are poised to dominate the game.

1 The Blackstone Group RECENT BUYOUT FUNDRAISING: $23 billion

DESCRIPTION: Since opening its doors with $400,000 in 1985, Blackstone has become known for sharp elbows and sharper deals. Witness its $3.8 billion buyout of Celanese in 2004: The firm put in $650 million in equity and almost immediately recouped $500 million with a junk-bond offering. Or the way it unloaded $13 billion worth of buildings in its recent $38.9 billion buyout of Equity Office Partners before the ink was dry on the deal. As a hedge against a cyclical downturn in private equity, co-founder and CEO Stephen A. Schwarzman (see following story) has diversified the firm into hedge funds, distressed debt, asset management, and oh, yes, real estate. Moreover, the 60-year-old designated CSFB alum Hamilton "Tony" James president and his de facto successor in 2004.

BOLDFACE ADVISORS: Former Treasury Secretary Paul O'Neill.

FUN FACT: Co-founder Pete Peterson counts Alan Greenspan and Henry Kravis as golf buddies.

2 Kohlberg Kravis Roberts & Co. RECENT BUYOUT FUNDRAISING: $21.6 billion

DESCRIPTION: Known primarily as a pure private-equity firm, KKR has bounced back from some of its 1990s missteps (Regal Cinemas, anyone?) and reduced its dependence on first cousins Henry Kravis and George Roberts, who founded the firm with their Bear Stearns mentor, Jerome Kohlberg, in 1976. The heart of the operation is an investment committee that meets every Monday. KKR dealmakers are divided into 11 industry groups, which focus on 100-day plans; there is also an internal consulting group called Capstone. The firm remains hot, thanks to an annual rate of return of roughly 27% and considerable dealmaking muscle.

BOLDFACE ADVISORS: The former group chairman of HSBC Holdings, Sir John Bond, is expected to help with deals in Asia. Ed Artzt, formerly of Procter & Gamble, George Fisher from Motorola, and General Jack Keane, former Army vice chief of staff, review the portfolio companies.

FUN FACT: When the Menlo Park, Calif., office gets together for lunch, George Roberts likes to grill people with brainteasers.

3 The Carlyle Group RECENT BUYOUT FUNDRAISING: $18.3 billion

DESCRIPTION: Characterized by a rival as the "Fidelity of private equity," Carlyle manages almost $55 billion in 48 funds across four disciplines: buyouts, venture and growth, real estate, and leveraged finance (it's also developing a multistrategy hedge fund). Founded in 1987 by William Conway Jr., Dan D'Aniello, and David Rubenstein, among others (and named after the New York City hotel), the firm has caught heat in the past for managing money from the bin Laden family and reportedly profiting from defense-related deals (which have never accounted for more than 1% of its total). Lately the massive 750-person firm has been known for its global reach, with 27 offices from New York City to Mumbai to Tokyo, plus portfolio companies employing more than 200,000 people and generating $68 billion in revenues. While calling its dealmaking style conservative, Carlyle, based in Washington, D.C., still boasts an average annual return of 34%. In 2001, Calpers bought a 5.5% stake in the firm.

BOLDFACE ADVISORS: Carlyle has swapped politicos like George H.W. Bush for business leaders, including its chairman, Louis Gerstner Jr., the former IBM chairman and CEO.

FUN FACT: Rubenstein and his wife met while working in the Carter administration.

4 Texas Pacific Group RECENT BUYOUT FUNDRAISING: $15.2 billion

DESCRIPTION: TPG's first major deal remains one of its signatures—the nervy turnaround of Continental Airlines. In 1993, TPG purchased the twice-bankrupt company and later sold its stake for ten times its original investment. The private-equity firm stepped into the airline industry again with its $8.7 billion buyout of Qantas last year. That helped TPG set a record for participating in the biggest dollar amount of deals ever done in a single year—$101 billion. Co-founder David Bonderman works out of Fort Worth, and fellow co-founder Jim Coulter is based in San Francisco. TPG is picking up steam in Asia, where it operates seven offices.

BOLDFACE ADVISORS: Former Air France chairman Bernard Attali and Leonard Schaeffer, the former CEO of WellPoint Health Networks.

FUN FACT: Bonderman does not do e-mail. Instead, his secretaries fax him the messages, and he dictates his responses.

5 Bain Capital RECENT BUYOUT FUNDRAISING: $13 billion

DESCRIPTION: Spun off from the consulting firm Bain & Co. in 1984, these Boston-based dealmakers fancy themselves the intellectuals of the private-equity world, and their investors are drawn more from university endowments than from pension funds. CEO-less since Mitt Romney left in 1999 to run for governor, Bain's 26 partners work as equals, although there are standouts, like Steve Pagliuca (Bain's top partner on the HCA megadeal), Joshua Bekenstein (on the board at Yale's business school), and Mark Nunnelly (a key brain behind the Domino's turnaround). However, this collective intelligence doesn't come cheap: Bain charges a 30% fee to its limited partners, vs. the standard 20% rate. And despite a hot 2006, in which it took Outback Steakhouse private for $3.2 billion, it is still smarting from accusations that a $121 million dividend it earned in 2002 for buying out KB Toys sent the company into Chapter 11 two years later. It has also been popping up in club deals, for which they've created a special co-investment fund with a 20% rate.

BOLDFACE ADVISORS: Jonathan Zhu, the former CEO of Morgan Stanley China, recently joined to help spend Bain's new $1 billion Asia fund.

FUN FACT: Pagliuca is now part owner of the Boston Celtics.

6 Providence Equity Partners RECENT BUYOUT FUNDRAISING: $11 billion

DESCRIPTION: When it opened in 1990, Providence was a quiet niche player that made big money on small media and telco deals. Fellow buyout firms took notice when Providence invested $63 million in VoiceStream Wireless (later renamed T-Mobile) in 1992, then sold it to Deutsche Telekom in 2000 for 19 times its investment. Providence has been on a roll—its reported rate of return is 70%. A nonstop cash influx and new offices in New Delhi and Hong Kong should calm limited partners concerned about smaller stakes in pricier club deals and rising multiples in the firm's sectors in the U.S.

BOLDFACE ADVISORS: Former FCC chairman Michael Powell.

FUN FACT: Rhode Island–based CEO Jonathan Nelson takes the firm on an annual ski trip to Alta, Utah.

7 Apollo Advisors RECENT BUYOUT FUNDRAISING: $10.1 billion

DESCRIPTION: Apollo's founder and chairman, Leon Black, served up a double shot of dealmaking in December: In the same week he acquired Realogy, owner of Coldwell Banker and Century 21, for $9 billion, followed by a $27.4 billion deal to purchase Harrah's Entertainment together with Texas Pacific Group. The latter club deal was an exception, because the firm, whose name derives from the Greek god of light and healing, normally works alone. Black, who spent the 1980s running mergers and acquisitions at Drexel Burnham Lambert, is a master of labyrinthine debt financing. And his ability to heal broken companies has resulted in compound annual returns greater than 40% since the firm's inception in 1990. Some 90% of Apollo's investments have generated positive returns.

BOLDFACE ADVISORS: Adam Aron, former CEO of Vail Resorts. He built the mountain into the pound sterling of ski towns.

FUN FACT: Apollo's penchant for distressed assets extends to office space. Its headquarters, which have unobstructed views of New York City's Central Park, are located in the former digs of Tyco.

8 Warburg Pincus RECENT BUYOUT FUNDRAISING: $9.2 billion

DESCRIPTION: This hoary firm traces its roots to 1966, when E.M. Warburg & Co., an investment-banking and private investment counseling firm founded in 1939, joined forces with Lionel I. Pincus & Co., a venture capital firm. Warburg Pincus built its reputation by restructuring Mellon Bank in the 1980s. More recently it has joined club deals, like Aramark in 2006, but has otherwise stayed away from the mega-takeovers. It excels at what might be described as the venture buyout: takeovers for less than $1 billion of smaller, younger, fast-growing companies, which it holds for several years. Recently the firm's best work has been in China and India. The biggest hit in India so far is Bharti Airtel, the country's largest cellular operator, in which Warburg bought a controlling stake for $337 million starting in 1999 and sold last year for $1.9 billion. The next big cashout may be WNS Holdings, a Mumbai-based IT outsourcer for which Warburg sold shares on the NYSE in July 2004. Last year Warburg closed a $1.2 billion real estate fund—about 60% of which is slated for buyouts in Asia.

BOLDFACE ADVISORS: Former Bank of America CEO David Coulter.

FUN FACT: Warburg flies all of its investment professionals in six countries to the Waldorf-Astoria in New York City each year for an annual meeting.

9 Cerberus RECENT BUYOUT FUNDRAISING: $8 billion

DESCRIPTION: Steven Feinberg, another Drexel Burnham Lambert alumnus, founded Cerberus in 1992 and gained a reputation for using distressed debt the way a Sith lord wields a light saber. Even though Cerberus calls itself a "private investment firm" because it goes anywhere for returns, its deals for ANC Rental Corp. (parent of Alamo and National), Mervyns, and Air Canada place it squarely among private-equity heavyweights. The firm (named for Hades' three-headed dog) isn't afraid to snarl at top-tier firms and win, as it did when it stole GMAC and Albertsons from KKR.

BOLDFACE ADVISORS: Former Treasury Secretary John Snow is a chairman, and former Vice President Dan Quayle is the global chairman. Quayle's seat on the board of directors of Nippon Credit Bank (since renamed Aozora Bank) smoothed the way for Cerberus to take control of the Japanese bank.

FUN FACT: Feinberg, a former captain of the Princeton tennis team, is an anti-elitist who works in a bare-bones office—albeit on Park Avenue—and drives a Chevy pickup truck.

10 Thomas H. Lee RECENT BUYOUT FUNDRAISING: $7 billion

DESCRIPTION: Founder Tom Lee started his firm in 1974 with $150,000—part inheritance, part loan from his brother. Lee moved to New York and left his Boston firm in 2005. Current senior partners Scott Sperling, Anthony DiNovi, and Scott Schoen continue to use his name. Lately Thomas H. Lee (the firm, not the man) has been hunting big game. Together with Bain Capital Partners and the Carlyle Group, Lee acquired Dunkin' Brands from Pernod Ricard for $2.4 billion in cash in March 2006. Again with Bain, Lee bid for Clear Channel Communications last fall. The price: $26.7 billion. With their most recent fund projected to close another $2 billion, expect to see Sperling, DiNovi, and Schoen continue to shake up the consumer, media, and business services sectors.

BOLDFACE ADVISORS: In October 2006 the firm hired media veteran Richard Bressler to lead its Strategic Resources Group. Bressler previously held positions at Viacom and was chairman and CEO of Time Warner Digital Media.

FUN FACT: Some 30 out of 38 investment professionals are Harvard Business School alumni.

BANKS

THEY LOVE BUYOUTS TOO

GONE ARE THE days when investment banks sat on the sidelines of the private-equity boom, content to let their M&A divisions collect advisory fees on deals. In 2006 they put their own money to work on some of the most ambitious buyouts of the year, including the $22 billion Kinder Morgan deal, the $8 billion Aramark deal, and the HCA deal.

The banks are discovering, though, that there's a fine line between competing hard for a lucrative buyout and annoying one of their clients. The pure private-equity shops are valuable customers, since they generate billions of dollars in fees to borrow debt to finance their takeovers. To avoid locking horns with buyout-hungry clients, J.P. Morgan spun off its private-equity unit, J.P. Morgan Partners, last year. Other banks have proved adept at managing the competing agendas—often co-investing on deals rather than taking the lead, or focusing their energies abroad. Here's a rundown on four of the major players.

Bear Stearns

Bear's most recent fund from 2006 is worth $2.7 billion, with investments in smaller finance and insurance companies. But the bank's private-equity arm (officially called BSMB, short for "Bear Stearns Merchant Banking"), has taken an interest in all kinds of investments—from designer jeans (Bear has a 50% stake in the brand Seven for All Mankind) to a 95-year-old packaging company in Michigan.

Goldman Sachs

One of the earliest banks to get into the private-equity industry, Goldman could make our list of the top ten private-equity firms simply by the sheer size of its fund. Its newest one is closing in on $19 billion. The GS Capital Partners V fund stands at $8.5 billion, giving Goldman the heft to pull off major deals like Raytheon, Aramark, and Kinder Morgan.

Merrill Lynch

Merrill has been involved with private equity since the mid-'80s, but recently the bank's Global Private Equity unit has become a profit machine. And it's no wonder, given the bank's involvement in the HCA deal. Let us count the ways: advising the buyout group for a reported $75 million in fees, taking a $1.5 billion equity stake in the group itself, and underwriting $22 billion in bank loans and bonds to finance the deal.

Lehman Brothers

Lehman launched its private-equity group in 1984 and now manages $13 billion in five asset classes: merchant banking, venture capital, real estate, credit-related investments, and private funds. Deals like its 2006 funding of Talgo, the Spanish train manufacturer, are typical of Lehman's middle-market focus.

THREE TO WATCH

J.C. Flowers

Founder J. Christopher Flowers, formerly of Goldman Sachs, built his reputation on bank deals—notably the 2000 takeover of Shinsei Bank, a deal he did with Ripplewood Holdings' Tim Collins. The two turned the company around for a profit of more than $1 billion. Next up for Flowers? German public bank HSH Nordbank, in which his firm acquired a $1.6 billion stake last year.

Silver Lake Partners

Even when Silver Lake was still unknown, marquee names like Larry Ellison, Bill Gates, and Michael Dell were investing in the firm. The reason? The principals know Silicon Valley and dealmaking. New York City–based co-founder Glenn Hutchins did time at Blackstone and Thomas H. Lee and is a member of the Council on Foreign Relations. Co-founder David Roux, who works out of Menlo Park, was an executive at Oracle. The firm pioneered and focuses on tech deals and boasts names like Flextronics and Nasdaq in its portfolio. Now sources close to Silver Lake say it will raise $10 billion for the largest tech buyout fund ever.

Summit Partners

Founded in 1984 as a firm focused on late-stage venture capital, Summit has evolved into a well-respected private-equity player that aims at growth companies. It gets its buyout ideas the old-fashioned way: from cold-calling CEOs. Offices in Boston, Palo Alto, and London target companies in many categories, including health care, energy, and financial services.