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Institutional Investor

An institutional investor is an organization that invests large sums of money on behalf of clients or members, such as pension funds, insurance companies, hedge funds, mutual funds, and endowments. Institutional investors typically have greater resources, expertise, and influence in the markets than individual investors. They engage in large-scale investment activities, often taking significant stakes in companies or assets, which can impact market liquidity and pricing.

Example

A pension fund manages billions of dollars in assets, investing in a diversified portfolio of stocks, bonds, and real estate to meet its long-term liabilities to retirees.

Key points

• Organizations that invest large amounts of money on behalf of clients or members.

• Examples include pension funds, hedge funds, insurance companies, and mutual funds.

• Have significant influence on market liquidity, pricing, and corporate governance.

Quick Answers to Curious Questions

Institutional investors manage large sums of money, have more expertise, and can impact market liquidity and pricing due to the size of their trades.

Pension funds, hedge funds, mutual funds, insurance companies, and endowments are examples of institutional investors.

Institutional investors’ large trades can impact liquidity, pricing, and even corporate governance due to their substantial ownership stakes in companies.