Institutional investor

An institutional investor is a capital market participants, whose investment volume is so high that it furnished a commercially organized business operation is required. Institutional investors such as credit institutions, investment companies, insurance companies and investment funds, but also institutions and bodies of the public sector (eg national or regional level ).

The institutional investors are facing small private investors, known as the audience. Since this group of investors only limited amounts invested and also an information disadvantage (access to capital market information only with a time lag, no sophisticated market models ), the markets are moved by the institutional investors. Between institutional and retail investors are high net worth private investors which have characteristics of both groups and therefore can not always be clearly assigned. But no later than when the private assets of professional asset managers supervised (often in so-called family offices ) outsourced or in a separate legal personality (eg asset management GmbH, foundation, etc ), you count a net worth private investors rather to the institutional investors.

As with institutional investors greater experience on the opportunities and risks of various investment products, it is assumed they have access to investment opportunities that are denied to the public ( for legal or liability reasons, or simply also because certain investment products for cost reasons not marketed to retail investors may be ), but enjoy the other hand, a lower investor protection. In some legal systems used is therefore often also qualified institutional investors.

Great importance is the institutional investors in corporate governance of listed companies, namely in the monitoring of the management, as small investors this does not have the means or individually do not have enough influence.