How do private and institutional investors invest

Institutional investors

Institutional or professional investors: they operate with large sums of money in the capital market and have the relevant financial and capital market expertise. Here you can find out everything you need to know about the topic.

What are institutional investors?

Institutional investors act as professional investors in the capital market. You are financially strong and have a lot of capital. As a result, they also have a significant influence on what is happening on the market.

In contrast, there are still semi-professional investors: inside and private investors: inside. The biggest difference is between institutional investors and private investors. While private investors can invest between 50,000 and 100,000 euros, semi-professional investors can also invest up to 500,000 euros. Institutional investors are still moving above this.

What types of institutional investors are there?

  • Credit institutions
  • Insurance companies such as Allianz, R + V or M├╝nchner R├╝ckversicherung
  • Investment funds and capital management companies such as family offices
  • Pension funds
  • Social insurance carriers: inside
  • Companies that invest pension funds
  • Churches
  • Associations and foundations
  • Municipalities

Institutional investors and their tasks

Professional investors: they collect capital in order to invest it in the capital market. Compared to private or small investors, these are financial intermediaries who manage capital on behalf of their customers and invest them profitably. With their financial strength, institutional investors have the opportunity to determine and decisively influence market events. They help z. B. Startups to grow.

Because of their expertise, experience and knowledge of the financial and investment market, they are also referred to as professional investors. However, small investors are not necessarily excluded from this status - provided they were previously active in the financial sector and have assets of more than 500,000 euros.

The differences: professional investor and private investor

The distinction between private investors and large institutional investors is particularly important for capital management companies, issuers and asset managers.

Institutional investors: inside

Private investors: inside

  • Invest large sums of money
  • Great influence on market activity
  • Decide your plant in terms of the economic interests of your customers
  • Mostly access to all financial instruments and capital markets
  • Investor protection is clearly limited with low investment restrictions
  • Is linked to financial products from certain issuers
  • Invest smaller sums
  • Little influence on market activity
  • Decide your investment in terms of personal asset management
  • Mostly limited access to financial instruments and capital markets
  • Independent investors who are not tied to third parties
  • Is not tied to financial products from specific issuers

You might also be interested in: