Institutional Investor
Professional market participants such as banks, insurers, pension funds and asset managers that invest with large capital pools.
Institutional investors are professional market participants that manage large pools of capital on behalf of others. The category includes banks, insurers, pension funds, endowments, sovereign wealth funds, asset managers, mutual funds, hedge funds and family offices. They dominate daily trading volume on the major exchanges and their buy and sell decisions move markets noticeably.
Because institutional investors have deeper research resources, better information access and longer time horizons, they are often labelled "smart money". Tracking their 13F filings is an established strategy for retail investors who want to benefit from professional analysis without spending hours on their own fundamental work.
Related terms
Alternative investment vehicle with a broad strategy mandate, light regulation and access typically limited to qualified investors.
Catch-all term for capital deployed by especially well-informed or historically successful investors.
Private wealth management vehicle for large family fortunes, often with a hedge-fund-like investment style.