Institutional Markets : Institutional Investors

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Institutional investors are any organizations or persons which collect quite number sums of money to invest in securities and also control a collection of share amounts to qualify for special treatment and less regulation. They can also include operating companies that decide to invest their profits to some degree in these types of assets. Insurance companies, mutual funds and pension funds are some examples of institutional investors. These institutional investors need to face some regulations. “Institutional investors always participate in private placements of securities due to their sophistication, in which certain aspects of the securities laws may be inapplicable.”

These institutional investors play role in the economy is to act as highly specialized investors on behalf of others. For example, an employee will have a pension from his employer as the employer gives that person 's pension contributions to a fund and the fund will be used to buy shares in a company, or some other financial product. Funds are greatly useful because they will hold a broad portfolio of investments in many companies. This spreads risk, so if one company fails, it will be only a small part of the whole fund 's investment.

Types of Institutional Investors in United Kingdom.

In Britain, the largest single category of institutional investor is the pension funds, which was gradually increasing from 3% of the market in 1957 to 31% in 1992 as they have largest corporate pension plans with
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