Institutional Investor

An institutional investor is an entity which invests capital belonging to one or more third parties for the profit of the third parties. This sets institutional investors apart from retail investors – entities which invest their own capital for their own profit. Institutional investors are typically compensated for their investment services through fees or commissions.

Investment funds, securities brokers and banks are examples of institutional investors. The Swiss pension funds which manage compulsory pillar 2 occupational retirement savings on behalf of employees of Swiss companies could also be considered to be institutional investors if they manage the investment of assets themselves.

Typically, institutional investors control much larger amounts of capital than private investors because their asset pools are made up of capital invested by hundreds, thousands or even millions of individuals and companies.

More on this topic:
Swiss stock broker comparison

Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.