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Institutional investors are legal entities, acting as holders of funds (in the form of contributions, interests) and carrying out their investment in securities, real property (including rights to real property) for profit. Institutional investors include investment funds, pension funds, insurance companies, credit unions (banks) (Davis & Steil, 2004). Institutional investors account for almost one half of trading on the New York Stock Exchange, and are, as a rule, trading with large blocks of shares, being determined by the concept of qualified Institutional Investors (Boubakri & Cosset, 2011).
In modern securities markets, institutional investors are among the key players, and especially their active development has been observed since the late 1980’s. The increase of importance of institutional investors was promoted, on the one hand, by the new trends in the securities markets as the significant simplification of individual investors access to these markets, networks distribution, the development of the methods of financial transactions and greater reliability of the financial market in general, and on the other hand, by the increase of population incomes in many countries around the world, which created motivation to invest savings (Boubakri & Cosset, 2011).
Institutional investors provide more effective management of investment resources, which cannot be provided by individual investors due to the lack of experience and skills. This management provides risk diversification by means of investing the funds of individual investors into various financial market instruments. Institutional investors also accumulate temporarily free funds of enterprises and population for their subsequent investment in the production of goods and services (Davis & Steil, 2004). At the same time, the investors remain the owners of their savings. Still, accumulating savings of small investors, institutional investors obtain significant resources, which makes it possible to reduce the costs of transactions in the securities market (Boubakri & Cosset, 2011).

References
Boubakri, N., & Cosset, J-C. (2011). Institutional Investors in Global Capital Markets. Emerald Group Publishing Limited.
Davis, E.P., & Steil, B. (2004). Institutional Investors. The MIT Press.