New York Post – With just two large investment banks remaining – Morgan Stanley and Goldman Sachs – questions are growing over who might step into the suddenly emptier playing field.

Many Wall Street watchers are pointing to the looming presence of large hedge funds and private-equity firms, which have been stealthily encroaching on many of Wall Street’s traditional lines of business for years now.

"I think the new Wall Street is not going to be on Wall Street," said Ferenc Sanderson, a hedge fund researcher at Thomson Reuters. "The headquarters of Citadel is in Chicago," he said.

Indeed, the $20 billion Citadel Investment Group is more often compared to Goldman these days.

Last year, Citadel branched into providing administrative and technical support to other hedge funds, not unlike the investment banks. Citadel also has a unit that executes trades for retail brokerages, akin to market makers like Morgan Stanley and Merrill Lynch.

It’s a far cry from the small operation Ken Griffin had when he founded Citadel with a modest $1 million in trading money in 1990.

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