Institutional Investors

Institutional investors are organisations which pool large sums of money and invest those sums in companies. They include banks, insurance companies, retirement or pension funds, hedge funds and mutual funds. Their role in the economy is to act as higly specialised investors on behalf of others.

Because of their sophistication, institutional investors may often participate in private placements of securities, in which certain aspects of the securities laws may be inapplicable. Institutional investors will have a lot of influence in the management of corporations because they will be entitled to exercise the voting rights in a company.