What does institutional investors own?
Institutional ownership is the amount of a company's available stock owned by mutual or pension funds, insurance companies, investment firms, private foundations, endowments or other large entities that manage funds on behalf of others.
Institutional investors are the movers and shakers of Wall Street—since they buy and sell stocks and other financial instruments in massive amounts, their trading decisions have a far more noticeable impact on asset prices than those of retail investors.
Institutional investors include the following organizations: credit unions, banks, large funds such as a mutual or hedge fund, venture capital funds, insurance companies, and pension funds. Institutional investors exert a significant influence on the market, both in a positive and negative way.
A 2017 study in pionline.com found that institutional investors owned about 78% of the market value of the Russell 3000 index, and they owned 80% of the large-cap S&P 500 index. The estimated dollar values of those investments are around $21.7 trillion and $18 trillion, respectively.
Voting Power: Institutional investors participate in shareholder voting on matters such as electing directors, executive compensation, mergers, and other critical decisions. Their votes can shape the outcome of these issues and hold management accountable.
Diversification versus competition
They are the three largest owners of most DOW 30 companies. Overall, institutional investors (which may offer both active and passive funds) own 80% of all stock in the S&P 500.
That said, institutional buyers are still a major force in the U.S. housing market, with a particular focus on single-family rental homes. These large investors typically purchase properties in bulk, often including entire neighborhoods or even small towns.
Institutional investors make money by charging fees and commissions to their members or clients. For example, a hedge fund may charge a certain percentage of a client's investment gains or total assets. There may also be flat fees for holding an account or making trades or withdrawals.
Vanguard takes institutional lead over BlackRock
BlackRock remains the world's largest asset manager overall.
What Is Institutional Ownership? Institutional ownership is the amount of a company's available stock owned by mutual or pension funds, insurance companies, investment firms, private foundations, endowments or other large entities that manage funds on behalf of others.
Who are the three largest institutional investors?
Within the world of corporate governance, there has hardly been a more important recent development than the rise of the 'Big Three' asset managers—Vanguard, State Street Global Advisors, and BlackRock.
The wealthiest 10% of American households now own 89% of all U.S. stocks, a record high that highlights the stock market's role in increasing wealth inequality. The top 1% gained over $6.5 trillion in corporate equities and mutual fund wealth during the pandemic, according to the latest data from the Federal Reserve.
In that environment, the median institutional investor produced 9.5 percent in annual returns from 2012 to 2021 (exhibit). Institutional investors we interviewed unanimously agree that the current environment is radically different from the global investment conditions of the previous three decades.
To become an institutional investor, earn at least a bachelor's degree in finance, economics or business and gain experience in a specialized area of investing, like real estate, stocks, venture capital or angel investing.
A retail investor is an individual or nonprofessional investor who buys and sells securities through brokerage firms or retirement accounts like 401(k)s. Institutional investors do not use their own money—they invest the money of others on their behalf.
One of the primary benefits of the institutional ownership of securities is their involvement is seen as being smart money. Portfolio managers often have teams of analysts at their disposal, as well as access to a host of corporate and market data most retail investors could only dream of.
Vanguard is the world's second-largest investment company or brokerage firm, offering a range of active and passive options, as well as a competitive fee structure and other attractive selling points. BlackRock, Inc. is the world's largest investment firm and asset manager.
Who Owns BlackRock? BlackRock is publicly owned, with its shares held by various shareholders, including institutional investors like Vanguard Group and State Street Corporation and individual shareholders. The specifics of these shareholders can change over time.
2. Under Section 13(f)(5)(A) of the Exchange Act, Berkshire Hathaway is an institutional investment manager that exercises investment discretion over $100 million or more in reportable securities, as defined in Rule 13f-1(c) under the Exchange Act.
According to national data provider CoreLogic, the sizable U.S. home investor share of ownership seen over the past two years held steady going into the summer of 2023. In March 2023, investors accounted for 27% of all single-family home purchases; by June, that number was almost unchanged at 26%.
What percentage of houses are bought by institutional investors?
Home investor shares were concentrated in Western, Southern and lower Midwestern states in Q2. Figure 7 shows this trend, with California (34%), Washington, D.C. (33%), Georgia (32%), New Mexico (31%), Texas (31%), Nevada (30%), Utah (29%), Arizona (29%) and Kansas (29%) posting the highest investor share.
BlackRock's Stance: Not Buying Individual Houses
“Bottom line: BlackRock is an active investor in the U.S. real estate market, but we are not among the institutional investors buying single-family homes.”
Institutions are estimated to account for as much as 70 percent of stock trading volume. All told, institutional investors controlled $25.3 trillion, or 17.4 percent of all U.S. financial assets as of the end of 2009, according to a report by the Conference Board.
Robinhood Markets, Inc. (US:HOOD) has 621 institutional owners and shareholders that have filed 13D/G or 13F forms with the Securities Exchange Commission (SEC). These institutions hold a total of 686,817,978 shares.
Institutional investors are entities or organizations that pool together large sums of money to invest in a variety of asset classes, including but not limited to stocks and ETFs. They operate on a scale that's often vast, compared to individual retail investors.
