Citadel, definitely. They already have started doing certain things once the domain of investment banks -- they make markets in stocks and options, for example. Recently they've hired a number of prominent fixed income traders, e.g. the head of JPMorgan's mortgage trading department. I think they're well on their way to becoming a leading securities firm. They're certainly big enough to purchase a smaller boutique to bring in expertise in mergers, IPOs, debt offerings, etc. The only problem is regulatory, given that they're a hedge fund, but I imagine this eventually could be resolved -- after all, Citi and JPMorgan all have large internal hedge fund arms.

Blackrock is a very different company. They manage more than a trillion dollars worth of assets, making Citadel seem paltry at ~$25bn. They haven't really shown much interest in branching away from their area of expertise: fixed income asset management.