Institutional Investors Definition

An institutional investor is a person or company that invests in securities with enough money to qualify for preferential treatment. There are two sides to the coin, however-most government regulations assume that institutional investors are savvy enough to avoid common mistakes, and therefore exempt them from many legal protections. Many personal investors use investment strategies mimicking the strategies of the really big institutional investors-after all, if a multi-millionaire is buying millions of dollars of stock in a company, he must be pretty sure the company is going to do well-he’s not a multi-millionaire by mistake. A typical institutional investor would be a large pension fund or a national life insurance company.