GOLDMAN, SACHS & CO. ANALYSTS PUBLISHED A PIVOTAL report in 1995 predicting that within a few short years the money management business would be dominated by a few giant firms, alongside scores of specialist boutiques. The Goldman analysts declared that big fund managers would need at least $150 billion in assets to survive. At the time, just nine firms in the U.S. had that much. The report sparked a widespread rethinking of the business as firms scrambled for a place among the top tier. Some of Goldman's biggest rivals led the charge, including Morgan Stanley, which acquired Van Kampen American Capital in 1996, and Merrill Lynch & Co., which bought the U.K.'s Mercury Asset Management in 1997. But no firm, seemingly, took the report's conclusions more to heart than Goldman itself. From $46.3 billion in assets and a 52nd-place slot in the 1995 Institutional Investor 300 ranking of the biggest...