institutional investor

A market participant who makes financial decisions on behalf of an organization—such as a mutual fund, exchange-traded fund (ETF), bank or pension fund. The other type of market participant is the retail (individual) investor, who makes personal investment decisions or employs someone to make personal investment decisions for them. Institutional investors are often beholden to investment objectives that place limits on how they invest. Because they trade in large amounts, institutional investors have more influence over the financial markets in general, but they also face limits on the types of portfolio strategies and tactics they can use.