1.
Definition
Big organizations that have large cash reserves that
need to be invested, i.e. they receive a lot of money and would rather invest
it rather than sit on it.
2.
Types
a. Banks
b. Insurance
Companies
c. Pension
Funds
d. Venture
Capital Organisations
3.
Protection
Fewer regulations protect them because it is assumed
they know what they are doing e.g. A bank can afford to employ a highly skilled
Investment specialist.
4.
Advantages
of Institutional investment
a. Can
invest large funds
b. They
market the company’s instruments thereby increasing their value
5.
Disadvantages
a. High
agency cost
b. Too
powerful because they can influence share prices on their own
c. If
an institutional investor sells its shares, it’ll lead to excess supply. This
will lead to a drop in the share price