A large organization that invests money on behalf of others is known as an institutional investor. Pensions, mutual funds, banks, hedge funds, insurance companies, and other entities are examples of these investors. A mutual fund, for example, is a type of institutional investor in which a fund manager buys and sells securities on behalf of the individual investors who purchase the fund.

An institutional investor is an organization or entity that pools large sums of money to invest on behalf of others. Examples include pension funds, mutual funds, insurance companies, endowments, and hedge funds. These investors operate professionally, often with access to advanced resources, research, and market expertise.

Institutional investors play a significant role in financial markets due to the sheer volume of capital they control. They influence market trends, liquidity, and pricing through their large-scale transactions. Their long-term investment horizons and risk management strategies often stabilize markets.

Unlike retail investors, institutional investors benefit from economies of scale, allowing them to negotiate lower fees and access exclusive investment opportunities. They are subject to regulatory oversight to ensure transparency and protect the interests of their clients. Their actions and decisions can significantly impact global financial markets.