Institutional investors pool large sums of money from organizations like banks, insurance companies, and pension funds to invest in assets like securities and real estate on behalf of others. They spread risk by holding broad portfolios of many companies so that failure of one company has little impact. As large shareholders, institutional investors can influence corporate management through voting rights and play a role in which companies remain solvent by buying and selling shares. Their job includes influencing company conduct and providing capital through investment management.
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Institutional investors pool large sums of money from organizations like banks, insurance companies, and pension funds to invest in assets like securities and real estate on behalf of others. They spread risk by holding broad portfolios of many companies so that failure of one company has little impact. As large shareholders, institutional investors can influence corporate management through voting rights and play a role in which companies remain solvent by buying and selling shares. Their job includes influencing company conduct and providing capital through investment management.
Institutional investors pool large sums of money from organizations like banks, insurance companies, and pension funds to invest in assets like securities and real estate on behalf of others. They spread risk by holding broad portfolios of many companies so that failure of one company has little impact. As large shareholders, institutional investors can influence corporate management through voting rights and play a role in which companies remain solvent by buying and selling shares. Their job includes influencing company conduct and providing capital through investment management.
Copyright:
Attribution Non-Commercial (BY-NC)
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Download as DOC, PDF, TXT or read online from Scribd
Institutional investors pool large sums of money from organizations like banks, insurance companies, and pension funds to invest in assets like securities and real estate on behalf of others. They spread risk by holding broad portfolios of many companies so that failure of one company has little impact. As large shareholders, institutional investors can influence corporate management through voting rights and play a role in which companies remain solvent by buying and selling shares. Their job includes influencing company conduct and providing capital through investment management.
Copyright:
Attribution Non-Commercial (BY-NC)
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Institutional investors are organizations which pool large sums of money and invest
those sums in securities, real property and other investment assets. They can also include operating companies which decide to invest its profits to some degree in these types of assets.
Types of typical investors include banks, insurance companies, retirement or pension
funds, hedge funds, investment advisors and mutual funds. Their role in the economy is to act as highly specialized investors on behalf of others. For instance, an ordinary person will have a pension from his employer. The employer gives that person's pension contributions to a fund. The fund will buy shares in a company, or some other financial product. Funds are 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.
Institutional investors will have a lot of influence in the management of corporations
because they will be entitled to exercise the voting rights in a company. They can actively engage in corporate governance. Furthermore, because institutional investors have the freedom to buy and sell shares, they can play a large part in which companies stay solvent, and which go under. Influencing the conduct of listed companies, and providing them with capital are all part of the job of investment management.
