Institutional investors are organizations which pool large sums of money and invest those sums in companies. They include banks, insurance companies, private equity and venture capital firms. They also include retirement or pension funds, hedge funds and sector specific mutual funds. Their role in the economy is to act as highly specialized investors on behalf of others.
Institutional investors have a lot of influence in the management of corporations because they are entitled to exercise the voting rights in a company. They can engage in an active role in corporate governance, influencing the conduct of listed companies and providing them with capital are all part of the job of institutional investors..
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. Thus it is imperative that they get the best advise by leading Experts in the market they operate in.
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