Glossary
Institutional investor
An organization that invests large pools of money for others, such as pension funds, mutual funds, insurers and endowments.
An institutional investor is an organization that invests money on behalf of other people or of itself at scale: pension plans, mutual fund and ETF sponsors, insurance companies, endowments, sovereign wealth funds, banks and hedge funds. The counterpart is the retail investor, an individual trading a personal account. Because institutions control most of the assets in US public markets, their buying and selling sets prices, liquidity and, through proxy votes, corporate governance.
How they differ from individual investors
Size changes everything about how a trade is done. A pension fund that wants 2 million shares of a stock that trades 4 million a day cannot simply send a market order; it would push the price against itself. Instead it slices the order with algorithms over days, uses block trades and dark pools, or works through a broker's trading desk. Institutions also face rules individuals do not, such as fiduciary duties to beneficiaries, investment mandates (for example "investment-grade bonds only") and regulatory capital requirements for insurers and banks.
Tracking what institutions own
Any investment manager with discretion over at least $100 million in qualifying US securities must file Form 13F within 45 days after each calendar quarter ends, listing its long positions.
"Institutional ownership" on a quote page is the share of a company's stock held by 13F filers. A high figure means the stock is widely held by professionals; a sudden drop across many filers can hint at changing sentiment, though it can also reflect index changes or fund outflows.