The Evolving Role of Institutional Investment Managers

Institutional investment managers represent a significant part of Wall Streets history and heritage. Institutional investors such as pension funds, investment companies and other large investors with huge capital resources drove much of the growth and profitability within the market for the last several decades. Having the financially resources to invest and move capital into large investment positions, institutional investment managers were able to influence the movement of stocks and control, to some extent, how companies played in the capital markets.

New Players in the Market

As hybrid investment management companies, such as hedge funds, became more sophisticated and were able to pool resources to influence trading activity, institutional investment managers have seen their influence over the markets wane. Hybrid investment firms were able to take advantage of the technology that permitted many small investors to have the same information and access to the markets.

Continued Role for Institutional Investment Managers

The capital commitments made by institutional investment managers still allow them to play an important role in the modern capital markets. However, this role is tempered by the emerging influence of other players that are newer to the markets.