Discuss the features that institutional investors typically share

Institutional investors, including pension funds, sovereign wealth funds, endowments, foundations, banks and insurers, share several traits. They usually manage large pools of assets, which brings economies of scale and access to private markets and co-investments. Many have long horizons, although banks and insurers are shaped by near-term liabilities. They operate under formal governance, with boards or committees, investment policy statements and delegated authority to staff or external managers. They face regulatory and legal constraints and often favourable tax treatment. Their principal–agent problems are distinctive, as trustees and staff act for beneficiaries, sponsors or the public. A good analysis applies these traits to a specific investor. A trap is assuming every institution has a long horizon and high liquidity tolerance.