Who are considered institutional investors?

Institutional investors are entities that invest substantial sums of money on behalf of others. They typically include organizations such as pension funds, insurance companies, mutual funds, and endowments, which have large amounts of capital to allocate in various markets.

Pension funds are significant players in the financial markets as they manage retirement savings for individuals and are often responsible for making long-term investment decisions that can impact the economy and the companies in which they invest. These investors are characterized by their ability to influence market trends and corporate governance due to the size of their investments, as well as their long-term investment horizon.

In contrast, individuals investing in stocks are retail investors, and while they play a crucial role in the market, they typically do not have the same level of capital or influence. Small businesses seeking loans are generally not categorized as investors; they are more often considered borrowers in the financial ecosystem. Non-profit organizations may invest funds, but they do not constitute institutional investors in the way that pension funds and similar entities do, which are focused on generating returns on behalf of a large pool of beneficiaries.