What are institutional investors characterized by?

Institutional investors are characterized by their ability to manage large amounts of capital, typically because they operate as organizations rather than individuals. This can include entities such as pension funds, insurance companies, mutual funds, and endowments, all of which collectively hold substantial financial assets. Their investment leverage allows them to influence markets significantly, and they often have the expertise and resources to conduct thorough research and analysis in their investment decisions.

The presence of substantial funds enables institutional investors to negotiate better terms for investments, access exclusive opportunities, and diversify their portfolios effectively compared to individual investors. While some options present various investor types, the defining feature of institutional investors is precisely this capacity for significant capital investment, which sets them apart in the financial landscape.