The world of investing is a complex one and not all investors are the same. The two main types are institutional investors and non-institutional investors and it is important to understand the difference between these groups. The institutional investors, like the name implies, are the big organisations in the industry as the mutual funds, money managers, pension funds, insurance companies, investment banks and hedge funds.
Powerful Investors
Institutional investors have a huge influence on the stock market’s movements as they are responsible for about three-quarters of the trades on the NY stock exchange which makes them very powerful. Additionally, due to the professional nature of their operations they are deemed to be experts in the field who make intelligent investments on behalf of other people.
This all means that if you have a pension or mutual fund then the investments will be managed by an institutional investment company because they will make safe, educated investments to grow your funds. Institutional investors are incredibly powerful and important in today’s day and age because their decisions can influence stock prices and they are in charge of other people’s money, including many of the biggest and most recognisable brands in the entire world.
Non-Institutional Investors
A non-institutional investor, meanwhile, is an investor that is using and managing their own money on their own behalf. They will invest for reasons such as planning for their retirement, achieving personal financial goals or raising money to send their kids to university.
Management Companies
It is clear that it is institutional investors that dominate the market and have the influence. Investment management companies like Wellington Management can help institutional investors, financial intermediaries, wealth managers and any other type of investor to achieve their objectives. This is thanks to intelligent investment teams and proprietary research abilities which can identify key investment opportunities around the world and identify the hidden risks which others would miss.
Institutional investment managers are capable of delivering long term results and stability with a focus on investment management empowered by the resources of a large, global business. This means that they are capable of meeting personally with company executives, they are able to evaluate companies in depth and understand entire industries quickly and to expert knowledge so that an intelligent decision can be made about how to use funds. This will include fixed income funds, equity, multi-asset funds and alternative investment funds.
Influence
Due to this expert knowledge and influence over the market, it is no surprise that the activity of institutional investment management companies is of interest to individual investors as it can help them to make informed decisions. Additionally, some investors may seek out investment opportunities with no institutional ownership in the hope that an institution will soon discover the opportunity and drive the share price up.
Overall, institutional investors are the big players who work on behalf of others and can have a huge influence over the stock market. They have expertise and the resources to carry out thorough research which enables them to make smart, educated investment opportunities which should help to grow the funds that they are in charge of.
Henry Lares is still early into his career as tech reporter but has already had his work published in many major publications including Tech Crunch and the Huffington Post. In regards to academics, Henry earned an engineering degree from Apex Technical School. Henry has a passion for emerging technology and covers upcoming products and breakthroughs in science and tech.
